The Cyprus Non-Domiciled Tax Status
An individual enjoys the Cyprus Non-Domiciled Status whether they are a tax resident of Cyprus or have not been a tax resident of Cyprus as per the Income Tax Law for a period of 20 consecutive years prior to the introduction of the law (16 July 2015).
An individual is considered a resident for tax purposes of Cyprus if they are physically present in Cyprus for an accumulated period exceeding 183 days during a calendar year or 60 days under the 60-day rule, maintains a permanent residential property (owned or rented), does not reside in another state for an accumulated period exceeding 183 days and has other defined Cyprus ties.
When a person has not been a tax resident of Cyprus for the last twenty years, the Cyprus Non-Domiciled Tax Status is granted, exempting one from capital gain tax on income from dividends and interest, and must be confirmed by the Cyprus Tax Authorities every year.
The Cyprus Non-Domiciled Tax Status – Tax Advantages
● A non-dom earning dividend income from foreign or local investments will not be subject to Special Defence Contribution in the amount of 17% as of 16 July 2015.
Dividend income is unconditionally exempt from Income Tax so tax payable by a Cyprus resident non-dom on dividend income will be zero.
A non-dom earning interest income from foreign or local sources will not be subject to SDC in the amount of 30% as of 16 July 2015. Interest income is also exempt from Income Tax so the tax payable by a Cyprus resident non-dom on interest income will be zero.
● Rental income:
A non-dom earning rental income from properties in Cyprus or abroad will not be subject to SDC in the amount of 3% as of 16 July 2015. Rental income will only be subject to Income Tax at the normal rates (following a 20% allowance).
The Cyprus Non-Domiciled Tax Status – Our Services
Efstathios C. Efstathiou LLC are very experienced in providing advice and compliance services to corporate executives and high-net-worth individuals who wish to undertake residence in Cyprus and benefit from the Cyprus Non-Domiciled Tax Status. A qualifying non-dom individual that is resident in Cyprus for tax purposes will pay no tax on capital gains and most investment income.