Cyprus Tax Residence status for individuals by the 60 Days Rule

The Parliament of Cyprus has approved by common consent the proposal of amending the rules for determining the tax residency of individuals in Cyprus – 60 days tax residency Cyprus

Under the currently existing law, individuals are considered tax residents in Cyprus if they were physically present for at least 183 days per year.

Under the new revised conditions an individual is considered a Cyprus Tax Resident if the following three criteria are cumulatively met:

1. They remain in Cyprus for at least 60 days a year of assessment. (60 days tax residency cyprus)
2. They carry out any business in Cyprus; and/or work in Cyprus and/or hold an office in a company that is tax resident in Cyprus during the tax year.
3. They maintain a permanent residence in Cyprus.

In order to receive Cyprus tax residency, the above-mentioned conditions must be satisfied, and the individual shall not be a tax resident in any other country during the year of assessment and shall not stay in any other country for a period exceeding 183 days in total in the same tax year.

It is further clarified that an individual who collectively fulfills the above conditions is not considered a tax resident of Cyprus in the tax year if in that year the exercise of any business activity and/or employment in Cyprus and/or the holding of an office to a Cyprus tax resident have ceased.

For calculating the days of presence in Cyprus:

● The day of arrival to Cyprus is considered one day in Cyprus.
● The day of departure from Cyprus is not considered a day in Cyprus.
● The arrival in Cyprus and the departure from Cyprus on the same day is considered one day in Cyprus.
● The departure from Cyprus and the return to Cyprus on the same day is not considered a day in Cyprus.

Under the new provisions, an individual who is not a tax resident in any other country in the same tax year will be taxed only on income arising from the business activities exercised in Cyprus. In addition, individuals who are tax residents in Cyprus, but not domiciled in Cyprus will be exempt from special defence contributions levied on dividends, interest, and rental income.

Furthermore, it is noted that for earnings arising from employment in excess of Euro 100,000 an individual is allowed for an exemption from tax of 50% of the salary for 10 years.