Why move to Cyprus?
Cyprus is an attractive European jurisdiction located in the eastern Mediterranean and offering a warm climate and attractive beaches. Located off the southern coast of Turkey, Cyprus is accessible from Europe, Asia and Africa. Nicosia is the centrally located capital of the Republic of Cyprus. The official language is Greek, with English also widely spoken.
Cyprus offers a range of personal tax incentives for expats and high net worth individuals moving to Cyprus.
Taxation of individuals
Tax residency in 183 days
If a person becomes a tax resident in Cyprus by spending more than 183 days in Cyprus in a calendar year, they will be taxed on income earned in Cyprus and also on foreign source income. Any foreign taxes paid can be credited against Cyprus personal income tax.
Tax residence according to the tax rule for 60 days
An additional scheme has been implemented whereby individuals can become tax residents in Cyprus by spending at least 60 days in Cyprus, provided that certain criteria are met.
Tax regime without domicile
Individuals who were not previously tax residents can also apply for non-domicile status. Individuals who qualify under the non-domicile regime are exempt from tax on; interest*, dividends*, capital gains* (except capital gains resulting from the sale of immovable property in Cyprus) and capital amounts received from pension funds, insurance and insurance. In addition, there is no wealth and inheritance tax in Cyprus.
*subject to contributions to the national health system at the rate of 2.65%
Income tax exemption: moving to Cyprus to take up a job
On the 26th of July 2022, the long-awaited tax incentives for individuals were implemented. Under the new provisions of the income tax legislation, a 50% exemption on income in connection with the first employment in Cyprus is now available to individuals with annual remuneration above €55,000 (previous threshold €100,000). This exemption will be available for a period of 17 years.
Reduced withholding tax/reduction of tax on income received from abroad
Cyprus has over 65 tax treaties which provide for zero or reduced withholding tax rates for; dividends, interest, royalties and pensions received from abroad.
Lump sums received as retirement gratuity are tax-free.
In addition, a Cypriot tax resident receiving pension income from abroad may elect to be taxed at a flat rate of 5% on amounts exceeding €3,420 per annum.
Additional Information
For further information on the attractive tax regime for individuals in Cyprus, please contact Robert Homem or Charalambos Pittas at Dixcart’s Cyprus office: advice.cyprus@dixcart.com .
