Cyprus Tax Resident Certificate for individuals

Introduction

We set out below the main requirements and conditions that must be met for an individual to obtain a tax residency certificate from the Cypriot Tax Department. A tax resident certificate is usually requested by foreign tax authorities in order to apply the provisions of a double tax treaty with Cyprus (e.g. apply lower or eliminated withholding taxes on payments to Cyprus residents) and/or confirm that an individual is indeed tax resident in Cyprus. A tax resident certificate is also required by foreign banks for the purposes applying the reporting mechanisms of the Common Reporting Standard (CRS).

Physical Presence Tests

A physical person is considered tax resident in Cyprus for any calendar year if he/she fulfills any one of the following two tests:

A. 60 days

Physical presence in Cyprus of at least 60 days in any calendar year (after 1 January 2017) and fulfillment of all the following conditions.

  1. Carries on a business in Cyprus as a self-employed person, or is employed in Cyprus or holds an office with a Cyprus tax resident person (e.g. be a director of a Cyprus company) at any time during the tax year.
  2. Does not spend more than 183 days in any other country
  3. Maintains a permanent home in Cyprus that is either owned or rented;
  4. Is not a tax resident of any other country;

If the business, employment or holding of an office is terminated during the year, then the individual would cease to be considered a Cyprus tax resident for that tax year.

B. 183 days

Physical presence in Cyprus for more than 183 days in any calendar year.

For the purpose of calculating the days of presence in Cyprus:

  • the day of arrival into Cyprus and arrival and departure from Cyprus on the same day is considered as a day in Cyprus.
  • the day of departure from Cyprus and the departure and return to Cyprus on the same day is considered as a day out of Cyprus.

Individuals who are considered Cyprus tax residents (either through the 183 day rule or the 60 day rule) are subject to Income Tax in Cyprus on their worldwide income, both from sources in Cyprus as well as from abroad. Non-Domiciled individuals are exempt from tax on dividends and passive interest income for 17 years.

Requesting a Cyprus Tax Residence Certificate

Assuming an individual fulfills any one of the two tests above (A.60 days or B.183 days) and is considered as a Cyprus tax resident, provided certain conditions and documentation needs are met (specified below), a Cyprus tax resident certificate can be obtained from the Cyprus Tax Department. The tax resident certificate can be requested either for the previous tax year or for the current tax year.

For example, during 2020, an individual can request a certificate for the current year (i.e. 2020) or for the previous year (i.e.2019), provided that all the relevant conditions are met.

Tax Resident Certificate – Previous Year – Conditions

To request a certificate for the previous year, the following conditions must be met:

▪ The individual is registered with the Tax Department and has a Tax Identification Code;
▪ All outstanding tax returns have been properly filed;
▪ All relevant taxes have been fully paid;
▪ The individual states the country or authority or bank for which the certificate is requested;

Assuming the above are in place, the individual can request the certificate in writing.

Tax Resident Certificate – Current Year – Conditions

In case an individual expects a receipt of dividends or interest from abroad and may require a Cyprus tax certificate for the current year.

The Cyprus Tax Department is able to issue a certificate of tax residency for the current year even though an individual may not have remained in Cyprus for the required number of days (i.e. 183 days or 60 days). Depending on the tax residency status of the individual and specifically whether the individual fulfils either the 183 days test or the 60 days test, there are different conditions that must be met.

The specific tax residency certificates (for the current year) are issued only in case the individual is requesting the tax certificate for the purposes of a reduced or eliminated foreign withholding tax from foreign dividends or interest.

Current Year Certificate – 183 days

To obtain a tax residency certificate under the 183 days test, the individual must fulfil the following conditions:

  • Be registered with the Tax Department and have a Tax Identification Code;
  • File all outstanding tax returns (if any);
  • Pay any outstanding taxes have (if any);
  • State the country for which the certificate is requested;
  • Sign a declaration (standardised document) affirming an intention to remain in Cyprus in aggregate 183 days in the current tax year.
  • Present evidence with respect to the foreign dividends and/or interest earned;
  • Present evidence showing an intention to remain more than 183 days in Cyprus (e.g. contract of employment – if applicable and/or rental agreement);

Current Year Certificate – 60 days

To obtain a tax residency certificate under the 60 days test, the individual must fulfil the following conditions:

  • Be registered with the Tax Department and have a Tax Identification Code;
  • File all outstanding tax returns (if any);
  • Pay any outstanding taxes have (if any);
  • State the country for which the certificate is requested;
  • Sign a declaration (standardized document) affirming his intention to remain in Cyprus for more than 60 days in the current tax year;
  • Present evidence with respect to the expected foreign dividends and/or interest;
  • Present a copy of his passport with entry/exist stamps, boarding passes, electronic tickets and other relevant information;
  • Present a copy of his/her employment contract (if applicable), title deed of owned property or rental agreement;

Contact Us

Feel free to contact us should you require assistance to obtain a Cyprus tax resident certificate. Assuming you meet all the conditions and you have all the documentation requirements readily available, normally we can obtain the tax certificate within a few days.

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