Cyprus Tax Residency Now in 60 Days
17 July 2017
Up until recently, in order for a person to qualify as a Cyprus tax resident, he had to spend at least 183 days of the calendar year in Cyprus. This is no longer the case as the parliament passed a bill on the 14th of July, 2017 pursuant to which any person that remains in Cyprus for at least 60 days during the tax year can qualify as a Cyprus tax resident provided that certain conditions are met.
According to the amended Income Tax Law, a person can qualify if: he maintains a permanent residence in Cyprus which can be either owned or rented by him; he is not be a tax resident in any other state within the year of assessment, he does not remain in any other state for a period exceeding the 183 days in total; and lastly, he conducts business in Cyprus and/or be employed in Cyprus and/or hold an office in a Cyprus company at any time during the year of assessment.
The new amendment is expected to be enforced on the 1st of January, 2018.
This development is of particular importance when coupled with the advantages offered by the “non–domicile” regime incentives introduced some time ago. Specifically, a person which now qualifies and opts for Cyprus tax residence under this new amendment but which is not domiciled in Cyprus, (namely does not consider Cyprus as his permanent place of residence) will be entiled to an exemption from tax on dividends and interest received either in Cyprus or abroad for a period of 17 years after becoming Cyprus tax resident. Additionally, for employment purposes, an individual with earnings in excess of €100.000, is allowed for an exemption from tax of 50% of his salary for a period of 10 years.
With this latest amendment Cyprus adds significant value to its already very accommodating and benefical tax regime which offers considerable benefits to those foreign nationals contemplating moving, residing, working or conducting business in or through Cyprus.
For more information feel free to contact Varnavas Playbell at Varnavas@playbell.com