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 Comparison

Criterion	60-Day Test	183-Day Test
Minimum days in Cyprus	60 days	More than 183 days
Business/Employment nexus required	Yes (employed, self-employed, or director in Cyprus)	No
Permanent home in Cyprus required	Yes (owned or rented)	No
Max days in any other country	Cannot exceed 183 days in any single other country	No restriction
Tax resident elsewhere	Must NOT be tax resident in another country	No restriction
Available since	1 January 2017	Always
Effect if nexus terminates mid-year	Lose residency for that year	Still resident if >183 days reached

Tax Residence Tests

Test 1: Physical Presence Test (60 Days + Conditions)

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

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.
Does not spend more than 183 days in any other country
Maintains a permanent home in Cyprus that is either owned or rented
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.

Test 2: Physical Presence Test (183 Days)

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

Calculation of Days 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.

Example 1 — 60-Day Test: Maria, a Greek national, spends 90 days in Cyprus in 2026, is employed by a Cyprus company, rents an apartment in Limassol, does not spend more than 183 days in Greece or any other single country, and is not tax resident in Greece. Maria qualifies as Cyprus tax resident under the 60-day test.

Example 2 — 183-Day Test: John, a UK national, spends 200 days in Cyprus in 2026 for personal reasons (no employment or business in Cyprus). Despite having no employment nexus, John qualifies as Cyprus tax resident under the 183-day test because he spent more than 183 days in Cyprus.

Example 3 — Failed 60-Day Test: Elena spends 75 days in Cyprus, is employed by a Cyprus company, but is also considered tax resident in Germany under German domestic law. Elena does NOT qualify under the 60-day test (because she is tax resident in another country) but may still qualify under the 183-day test if her total days exceed 183.

Interaction Between the Two Tests

The two tax residence tests operate independently of each other. An individual needs to satisfy only one test to establish Cyprus tax residency:

The two tests are independent — qualifying under either test is sufficient to establish Cyprus tax residency.
The 60-day test was introduced to attract professionals, entrepreneurs, and digital nomads who divide their time across multiple countries.
The 183-day test is the traditional test and requires no conditions other than physical presence.
An individual who meets both tests is simply Cyprus tax resident (no double benefit or penalty).
If a person fails the 60-day test (e.g., because they are tax resident elsewhere), they can still qualify under the 183-day test if their total days in Cyprus exceed 183 days.

Tax Liability of Residents and Non-Residents

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)

Foreign Tax Credit

Cyprus tax residents are taxed on worldwide income but can claim a credit for foreign taxes paid on income that is also taxable in Cyprus. The foreign tax credit mechanism operates as follows:

The credit is available whether or not a Double Tax Treaty (DTT) exists between Cyprus and the foreign country — this is a unilateral credit.
Where a DTT exists, the credit is calculated in accordance with the treaty provisions, typically limited to the lower of the foreign tax paid and the Cyprus tax on that income.
Where no DTT exists, the credit equals the lower of: (a) the foreign tax actually paid, or (b) the Cyprus tax attributable to that foreign income.
Foreign tax credits cannot exceed the total Cyprus tax liability — excess credits are not refundable and are generally not carried forward to future years.

Double Tax Treaty Network

Cyprus has concluded over 65 Double Tax Treaties (DTTs) with countries around the world, providing mechanisms for avoiding double taxation and preventing fiscal evasion. These treaties are instrumental in protecting the tax interests of resident and non-resident individuals.

Treaty provisions vary but typically include:

Employment income: Usually taxed only in the country of residence unless employment is exercised in the other state for more than 183 days in any consecutive 12-month period.
Pensions: Often taxed only in the state of residence, providing relief for retirees relocating to Cyprus.
Dividends and interest: Often subject to reduced withholding tax rates at source, with typical rates ranging from 5% to 15% depending on the treaty.
Capital gains: Treaty treatment varies; some treaties provide exemption in the source country depending on ownership thresholds and holding periods.

Individuals planning to relocate to Cyprus should analyze the applicable DTT between Cyprus and their current country of residence before the move, as treaty provisions may affect the tax treatment of income received during the transition year and the ability to claim tax credits. Early planning can identify opportunities to optimize tax efficiency during the relocation period.

Domicile Status and the Non-dom Regime

✦ New from 2026

As from 1 January 2026, the concept of tax residence has been aligned with domicile status for Special Defence Contribution (SDC) purposes. An individual is deemed to be domiciled in Cyprus once they have been a Cyprus tax resident for at least 17 out of the last 20 tax years prior to the tax year under assessment.

Once an individual attains Cyprus domicile status, they remain domiciled in Cyprus unless they maintain a 20-year period of non-Cyprus tax residency. This formal codification of the “deemed domicile” rule provides important tax planning implications, particularly regarding Special Defence Contribution obligations on dividend and interest income.

Non-dom Extension Option (New from 2026): For individuals who have attained Cyprus domicile status based on having their domicile of origin outside Cyprus, the non-dom SDC exemption can be extended for up to two additional five-year periods by paying a fee of €250,000 per five-year period. This allows eligible individuals to maintain the non-dom regime benefits beyond the initial 17-year period. Once the extension periods are exhausted, the individual becomes subject to full SDC taxation on dividend and interest income.

Disclaimer

Please note that the information provided here is for general guidance only and does not constitute professional tax advice. Tax laws and interpretations are subject to change, and individual circumstances can significantly affect tax obligations and benefits.

Contact Us

For personalized tax advice tailored to your specific situation, we strongly recommend consulting with a qualified tax professional. Our team is equipped with the expertise to navigate the intricacies of Cyprus tax law and provide you with customized solutions. Contact us to ensure that you are making the most informed decisions for your tax-related matters.

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