Individual’s Tax Residence in Cyprus

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

Tax Residence 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.

Charge of tax

Individuals 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.

Individuals considered non-Cyprus tax residents are subject to Cyprus tax on income accruing or arising from sources in Cyprus only, on:

  • Profits or other benefits from a permanent establishment situated in Cyprus or on any office or employment exercised in Cyprus
  • Pensions derived from past employment exercised in Cyprus
  • Rent from property situated in Cyprus
  • Trade goodwill reduced by any amount incurred for the purchase of such trade goodwill
  • The gross income derived from the exercise in Cyprus of any profession or vocation
  • The remuneration of public entertainers and the gross receipts of any theatrical, musical or other group of public entertainers
  • Benefit in kind equal to 9% per annum on the monthly balance of loans or other financial facilities granted to an individual, director or shareholder (including the spouse and relatives up to the second degree of kindred).

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