The Cyprus Non-Domicile Regime – An Attractive Tax Regime for Individuals Relocating to Cyprus
Posted: Wed Feb 19, 2025 9:59 am
Cyprus has become an attractive option for companies and individuals. Advantageous tax incentives exist and Cyprus is popular as both a corporate and residential location, offering a sound infrastructure, and also enviable weather.
Benefits Enjoyed by Tax Residents of Cyprus who are not Domiciled in Cyprus
As a result of pre-existing tax legislation and the exemption from Cyprus’ Special Contribution to Defence Tax (SDC), introduced in 2015 legislation, non-domicilaries benefit from a ZERO rate of tax on the following sources of income:
Interest
Dividends
Rental income
Capital gains (other than on the sale of immoveable property in Cyprus – subject to kuwait mobile database a partial exemption on newly acquired property)
Capital sums received from a pension, provident or insurance fund
These zero tax benefits are enjoyed, even if the income has a Cyprus source and is remitted to Cyprus.
In addition there are NO wealth or inheritance taxes in Cyprus.
Other Beneficial Features of the Cyprus Tax System for Individuals
Income Tax Reduction for New Personal Income Tax Payers
Individuals who were not previously resident in Cyprus and take up residency in Cyprus for work purposes are entitled to the following reduction, as long as their annual salary is greater than €55,000:
50% of the salary earned in Cyprus is exempt from income tax for a period of seventeen years.
Low Tax Rate: Foreign Pensions
Individuals receiving a pension arising from services provided abroad can elect to pay an income tax rate of 5% on pension income in excess of €3,420.
Benefits Enjoyed by Tax Residents of Cyprus who are not Domiciled in Cyprus
As a result of pre-existing tax legislation and the exemption from Cyprus’ Special Contribution to Defence Tax (SDC), introduced in 2015 legislation, non-domicilaries benefit from a ZERO rate of tax on the following sources of income:
Interest
Dividends
Rental income
Capital gains (other than on the sale of immoveable property in Cyprus – subject to kuwait mobile database a partial exemption on newly acquired property)
Capital sums received from a pension, provident or insurance fund
These zero tax benefits are enjoyed, even if the income has a Cyprus source and is remitted to Cyprus.
In addition there are NO wealth or inheritance taxes in Cyprus.
Other Beneficial Features of the Cyprus Tax System for Individuals
Income Tax Reduction for New Personal Income Tax Payers
Individuals who were not previously resident in Cyprus and take up residency in Cyprus for work purposes are entitled to the following reduction, as long as their annual salary is greater than €55,000:
50% of the salary earned in Cyprus is exempt from income tax for a period of seventeen years.
Low Tax Rate: Foreign Pensions
Individuals receiving a pension arising from services provided abroad can elect to pay an income tax rate of 5% on pension income in excess of €3,420.