60 Day Cyprus Tax Residency
In 2017 Cyprus introduced a new legislation offering the possibility of “zero tax environment” for non-domicile residents, who live in Cyprus only for 60 days per annum, as explained below.
Cyprus Parliament brought forward an amendment to the initial definition of “Cyprus Tax Resident Individual”, as indicated in the Income Tax Law 118 (I)/2002. The amendment became viable from the 01st of January 2017. The amendment allows the individual to be considered a Cyprus tax resident under the 60 days scheme, specific conditions apply.
The amendment explained:
An individual will be considered as a Cyprus tax resident if he/she:
- Does not reside more than 183 days in any country within the taxable annum.
- Is not a tax resident for another country during the same tax year.
An individual must also satisfy the below-mentioned conditions:
- Reside in Cyprus for a minimum of 60 days (not necessarily continuously) during the tax year.
- Operate a business in Cyprus (as a director, no nominee director allowed to be appointed); have an employment in Cyprus or hold an office in tax resident company of Cyprus at any time throughout the tax year.
- Must maintain a permanent residence in Cyprus (either rented or owned).
Once all the above-mentioned conditions are satisfied, an individual can be considered as a tax resident of Cyprus.
N.B. If an individual is a tax resident of Cyprus, the tax is imposed on the income received from all worldwide sources (within and outside Cyprus).