Taxation for Individuals

A Cyprus tax resident physical person is any person who is physically present in Cyprus for more than 183 days in a calendar year. It does not matter the purpose of being in Cyprus, nor is it a condition that a Cyprus tax resident person owns or rents accommodation in Cyprus. It is literally based on the number of days without any further conditions.

In calculating the days:

• the day of departure is considered a day outside of Cyprus
• the day of arrival is considered a day in Cyprus
• arriving in Cyprus and departing on the same day is considered a day in Cyprus, and
• departing from Cyprus and arriving on the same day is considered a day outside of Cyprus

Also as of 1 January 2017, an individual will be considered a Cyprus tax resident if he/she:

• does not spend more than a total of 183 days in any country within a tax year; and
• is not a tax resident of another country within the same tax year

and satisfies the following three conditions:

• remains in Cyprus for at least 60 days during the tax year;
• carries on a business in Cyprus or is employed in Cyprus or holds an office in a Cyprus tax resident company at any
  time during the tax year; and
• maintains a permanent residence in Cyprus, which can be either owned or rented.

It is important to note that, if the employment/business or holding of an office as per (b) above is terminated, then the individual shall cease to be considered a Cyprus tax resident for that tax year under the 60 days tax residency scheme.

Where a person is non-domiciled in Cyprus, but is a Cyprus tax resident, the following main benefits exist, for a period of at least 17 years, i.e. until the person is deemed domiciled in Cyprus:

• no Cyprus tax is payable on receipt of any dividend income from anywhere in the world (although on foreign
  dividends, the source country may withhold taxes)
• the provisions whereby a Cyprus tax-resident company must declare at least 70% of its after-tax accounting profits
  within two years (known as the ‘deemed distribution rules’), do not apply to that proportion of shareholding beneficially
  owned by a non-Cyprus domiciled individual
• no Cyprus tax is payable on receipt of interest income from anywhere in the world (although on foreign interest,
  the source country may withhold taxes)