Non Dom Cyprus
The Non Dom Cyprus rule, offers some excellent tax planning opportunities to foreigners – both from within the EU and the rest of the world. And the requirements that one needs to meet, are pretty simple too.
Non - dom in Cyprus
Under the Non Dom Cyprus rule, foreigners – both from within the EU and the rest of the world – can choose to transfer their tax residency to Cyprus. By doing so, they gain access to significant tax planning opportunities.
In an effort to attract more foreign nationals, the Cypriot government drafted and passed into law its own non-domicile (non-dom) tax status scheme back in 2015.
Under this rule, foreigners—both from within the EU and the rest of the world—can choose to transfer their tax residency to Cyprus and be considered a non-domiciled tax resident on the island for a period of no longer than 17 years.
What is domicile and how can it be defined
Legally speaking, domicile can be defined by two specific conditions:
- Domicile can be of origin or received via the individual’s father upon their birth.
- Domicile of choice, on the other hand, is determined when an individual sets up a physical home in a specific location and makes it obvious that it is their permanent residence.
If Cyprus is the domicile of origin of a specific individual, they can still claim non-domicile status as long as they comply with one of two stipulations:
- They must have kept a domicile outside of Cyprus while not having been a tax resident of the island for a continuous period longer than 20 years.
- They were not a tax resident of Cyprus for a period longer than 20 consecutive years preceding the establishment of the island’s non-dom tax status legislation.
Using non – dom status as an effective tax planning tool
Throughout the globe, plenty of ultra and high-net-worth individuals (HNWIs) and other savvy investors make use of non-dom tax status programs as effective tax planning tools.
In most, if not all cases, these specific programs reward the individuals with a wide gamut of tax benefits including tax exemptions, tax relief, tax-free income, the application of beneficial dual tax treaties, and plenty of others.
Jurisdictions such as Ireland, Malta and the United Kingdom, among others, apply their own style of non-dom tax status, granting foreigners who are looking to set up their tax residence, company registration, and even family relocation in their country with plenty of financial and tax-related benefits.
While each program has its own intricacies and advantages, the Cyprust non-dom tax status scheme remains a favorite among global investors and companies wanting to relocate their business.
Non Dom in Cyprus and why it is a favorite tool for tax planning purposes
The Cyprus non dom tax status program, will offer you substantial tax benefits, if you decide to adopt it. Benefits for you, your family, as well as company.
Here’s a summary of some of its main advantages:
- Worldwide dividend income as well as interest income is completely tax-free for 17 years.
- Income generated from the sale of bonds, derivatives, and other financial instruments, is received tax-free
- Income made from the sale of foreign real estate is not subject to capital gains tax.
- No taxation on estate, wealth, inheritance, and gifts.
- A 5% tax on income received from foreign pensions for any amount over 3,420 Euros.
- Any foreign employee that becomes a Cyprus tax resident, enjoys 50% annual tax exemption (provided he earns more than EUR 100,000 per annum) as well as complete tax exemption on gain from sale of shares.
Why the Cyprus non – dom programme has become so successful.
It comes to no surprise, why the Cyprus non dom programme, has been so successful.
Cyprus has been very successful attracting investors, businesspeople, HNWIs, as well as entrepreneurs, like yourself.
The combination of multiple tax exemptions—be it dividends, estate, gift, inheritance, or income on the sale of derivatives and bonds—and the simple and smooth tax residency application process makes Cyprus a highly attractive destination for both individuals and companies interested in making a move into the European Union.
If you add to this the Mediterranean sunshine, a booming financial services industry, delectable wine and food, and some of the most beautiful and pristine beaches in the world, Cyprus is the obvious choice for any worldly and discerning investor.
How do you qualify for the Cyprus non-dom programme?
So, what do you have to do to become a tax resident in Cyprus?
The 183-day rule
If you spend 183 days residing in Cyprus during an entire tax year, then you are considered a tax resident in the country. Lucky you.
The 60-day rule
The 60 day rule is the rule that most people happily go for. After all, residing in a sunny island for 60 days per year, is not such a difficult feat.
Starting in 2017, if you spend less than 183 days in Cyprus, you can still be deemed a tax resident as long as you fulfil the following conditions:
- You don’t spend more than 183 days in another country.
- You’re not a tax resident in another jurisdiction.
- You reside on the island for at least 60 days within a fiscal year.
- You keep a permanent home on the island, either through lease or sale agreement.
- You run a business or have a job in Cyprus or hold an office in a company (e.g you are a Director in a Cyprus company).
Cyprus’ non-dom tax status program. Helping you with your financial tax planning.
If you become a tax resident in Cyprus, you will also benefit from the extensive knowledge, skills, and boutique services of the island’s financial and fiduciary industry.
In addition to setting you up as a Cyprus tax resident, we are here to help you plan your taxes and financial obligations in an effective, speedy, and ultimately profitable manner.
Our financial tax planning services include:
- Audit & Assurance
- Payroll Services
- Value Added Tax
- Corporate Tax
- Income and Individual Tax
What about relocation services?
Are you worried about packing up, moving to a new country, and all the scary yet exciting feelings that entail?
Don’t fret. We will provide you with plenty of much-needed relocation assistance.
Some of our relocation services include:
- Arranging for visas and long-term resident permits.
- Procuring temporary housing.
- Recommending schools for your children and language training.
- Helping with job placements.
- Easing your transition into a new country and culture.
- And more!
Let's talk! Fill in the form below and schedule your 30 minute free consultation with one of our corporate lawyers, to discuss any questions about acquiring the Cyprus non-dom tax status.