Tax Alert - New Relaxed Cyprus Tax Residency Criteria For Individuals

As per the previous provisions of the Cyprus tax legislation an individual being physically present in Cyprus for a period exceeding 183 days is considered as being Cyprus tax resident.

As from 1 January 2017 onwards the Cyprus tax law has been amended regarding Cyprus tax residency criteria for individuals. More specifically, an individual who does not stay more than 183 days in another country for the same tax year and also is not tax resident in another country may be considered as Cyprus tax resident if one of the following conditions are met:

1. The individual is physically present in Cyprus for at least 60 days in a tax year;
2. The individual is employed in Cyprus or exercises any business in Cyprus for any period during the tax year;
3. Owns or rents a permanent home in Cyprus;

In the tax year in which none of the above conditions will be met the individual will cease to be considered Cyprus tax resident.

The Law to enforce the above provisions has been voted and is expected to be published in the Official Gazette on Friday 21 July to come into force as from tax year 2017 onwards.

How we can assist

We can fully assist towards reviewing the facts under consideration and from there on for the whole procedure for obtaining the Cyprus tax residency for the individual. Such a successful application will enable the foreign individual to apply the new Cyprus tax resident non-domicile regime which allows for full exemption from special contribution for defence tax on income from dividends, rents and interest.