Cyprus non-dom status
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Cyprus non‑dom status is a tax concept for an individual who is a Cyprus tax resident but not domiciled in Cyprus (non‑domicile), often shortened to non‑dom (sometimes misspelled online as “non‑micial”). It grants an SDC exemption on dividend, interest, and rental income—Cyprus income tax still applies, and there is no remittance basis, so worldwide income is taxed. You can become a resident under the 183‑day rule or the 60‑day rule if strict requirements are met (permanent home, Cyprus employment or office, and not tax resident elsewhere). The regime’s duration lasts until you are deemed domiciled after 17 years out of 20 as a resident, at which point the SDC benefits end. For 2025, the rules and rates remain in force today, and you can support your position with a Tax Residency Certificate and a non‑dom SDC declaration. Below you’ll find a simple residency day calculator, a practical checklist, and clear examples on foreign income, rental income, and how to combine salary incentives with non‑dom benefits.
Cyprus non-dom status, in plain English
If you hear people tossing around “non” and “dom” like confetti, here’s the substance: Cyprus non‑dom status is a tax idea, not a visa or passport. It sits at the crossroads of three laws: the Income Tax Law (what counts as income), the Special Defence Contribution Law (SDC, a separate levy on certain passive income), and the Wills & Succession Law (where “domicile” is defined). Combine them correctly and a Cyprus tax resident who is non‑dom can legally pay far less tax on dividends and interest, even on foreign income, than in most EU capitals.
As of today, under the 2025 rules, the regime remains intact and very competitive by European standards. There is no remittance basis in Cyprus; residents are taxed on worldwide income. The magic is that the SDC exemption for non-domiciled individuals removes the usual SDC hit on dividends and (passive) interest. That’s the core lever. The rest is housekeeping: become a tax resident under the 183‑day or 60‑day rule, prove you’re non‑dom under the domicile rules, and align your income mix.
A quick glossary: residence vs domicile vs deemed domicile
Residence is about “where you live this year” for tax. In Cyprus, you’re a tax resident if you pass either the 183‑day test or the 60‑day rule with its extra conditions.
Domicile is about your long‑term “home of law” under the Wills & Succession Law—by origin at birth or by choice. It’s not the same as citizenship or where you sleep this month.
Deemed domicile for SDC kicks in if you have been a Cyprus tax resident for at least 17 out of the last 20 years. Hit that 17‑years threshold and you’re treated as domiciled for SDC, which can switch off some non‑dom benefits.
The 183‑day rule and the 60‑day rule, without the fluff
Cyprus residency is a calendar‑year test. The simple path is the 183‑day rule: be physically present in Cyprus for 183+ days in the year. Easy to apply, easy to evidence, easy to defend.
The flexible path is the 60‑day rule: you can be a Cyprus tax resident in just 60 days if all of these requirements are met in the same tax year:
- Spend at least 60 days in Cyprus.
- Do not spend 183+ days in any other single country.
- Are not tax resident in any other country.
- Maintain a permanent home in Cyprus (owned or rented).
- Carry on business in Cyprus and/or are employed in Cyprus and/or hold an office (e.g., director) in a Cyprus tax resident company. If that engagement ends during the year, you fail the rule for that year.
Day‑count calculation is mechanical. Arrival day equals a Cyprus day; departure day does not. Arrive and depart the same day? That day counts as in Cyprus. Depart and arrive the same day? That day counts as out of Cyprus. Use a simple calculator to log entries/exits, then reconcile to tickets and passport stamps. It’s dull, but it’s your foundation.
The non-domicile regime and what it actually exempts
The non‑dom (non-domicile) regime changes how SDC bites. SDC is a separate levy from income tax. For individuals who are both tax resident and domiciled (or deemed domiciled), SDC is normally:
- Dividends: 17%
- Passive interest: 30%
- Rental income: 3% on 75% of gross rent (effective 2.25%)
A tax resident individual with non‑dom status is exempt from SDC on dividends and passive interest. That’s the big win. Note that contributions to the General Health System (GeSY) may still apply to such income (currently 2.65% up to the statutory cap).
Rental income is different. For Cyprus tax residents, rental income is subject to normal income tax after allowable deductions, and SDC at an effective 2.25% (3% on 75% of gross), typically irrespective of domicile. In other words, non‑doms usually still pay the rental SDC, plus income tax, albeit often with reliefs. Structure your property portfolio with that in mind.
Dividends, interest and the SDC exemption
- Dividend income: No SDC for non‑dom residents, whether the dividend is Cyprus‑source or foreign. Income tax does not apply to dividends in the ordinary course; GeSY may apply.
- Passive interest: No SDC for non‑doms. Interest arising in the ordinary course of business is taxed as business income (no SDC either way), so classification matters.
A quiet but valuable corollary: the “deemed dividend distribution” rules that can levy SDC on undistributed profits of Cyprus companies mainly target shareholders who are tax resident and domiciled. A resident (non-dom) of Cyprus is outside that net for SDC purposes, which adds planning flexibility for closely held companies.
Salary, dividends and the 50% first-employment exemption
Income tax in Cyprus is progressive, with the first €19,500 of taxable income at 0% and the top marginal rate at 35% above €60,000. Two incentives interact nicely with non‑dom planning:
- 50% first‑employment exemption: For “first employment” in Cyprus commencing under current rules, eligible individuals earning above the threshold (commonly referenced at €55,000) may enjoy a 50% income tax exemption on employment income for up to 17 years, provided they were not Cyprus tax resident for a long pre‑arrival period. Transitional and detailed conditions apply; documentation is essential.
- 20% (or €8,550) exemption: A separate, lower‑threshold relief may apply for up to 7 years for certain new arrivals with lower salaries.
Combine these with SDC‑free dividends (while you’re non‑dom) and you can legitimately tilt remuneration toward dividends once you have a clean corporate profit base. Don’t force dividends without distributable profits and proper board minutes; Cyprus is formalist on corporate law.
A simple pay mix sketch for a founder
- Salary: Target just enough salary to optimize social insurance, maintain substance, and capture any first‑employment exemption if eligible.
- Dividends: Extract profits via dividends from a Cyprus‑resident company once audited profits exist; as a non‑dom resident, no SDC on receipt, and no income tax on dividends.
- Bonus: Avoid ad hoc “interest” or “service fees” that muddle character; classification determines whether SDC or income tax applies.
Quick answers I get every week
Still have a questions?
Is the non-dom regime a remittance basis?
No. Cyprus taxes residents on worldwide income. The non‑dom regime is an SDC exemption on dividend and passive interest, not a remittance concept.
Do non‑doms pay SDC on rental income?
Expect SDC on rental income at an effective 2.25% even as a non‑dom, plus income tax on rental profit. Plan your leverage, upkeep, and holding structure accordingly.
What about capital gains tax?
Cyprus has no CGT on most disposals of shares and other qualifying securities. CGT applies to gains from Cyprus immovable property and to shares deriving value from such property. That’s one reason many asset holders choose Cyprus.
How long do benefits last?
Up to the point you become deemed domiciled—i.e., when you have been a tax resident for at least 17 out of the last 20 years. Track the duration closely.
Can I mix salary and dividends?
Yes. Use employment reliefs where eligible, keep salary commercially sensible, and distribute audited profits as dividends. As a resident (non-dom) of Cyprus, dividends are typically exempt from SDC while you remain non‑dom.
What about foreign taxation?
Double tax treaties and unilateral relief prevent double taxation in many cases. Keep proof of foreign tax paid. Account for GeSY on certain passive income up to the annual cap.
Where do I start today?
Decide which residency route fits your travel reality (60 days or 183 days), secure your permanent home, lock in a Cyprus business/employment/office tie, and set up a clean compliance stack: registrations, logs, and a yearly residency certificate. The regime’s benefits come from disciplined execution, not hashtags.
| Aspect | What it means today (2025) | Tax impact for a Cyprus tax resident (non-dom) | Key requirements and duration | Proofs, certificates, filings | Quick example / calculator |
|---|---|---|---|---|---|
| Who is a Cyprus non-domiciled (non-dom) individual | A tax resident of Cyprus who is not domiciled in Cyprus under Wills & Succession Law | Access to SDC exemptions on dividends, interest and rental SDC; income tax still applies where relevant | Non-domicile applies until deemed domicile is triggered (17 out of 20 years of tax residency) | Keep evidence of non-domicile and tax residence; provide non-dom declaration to payers to stop SDC withholding | If you moved to Cyprus in 2025 and were non-resident for the last 20 years, you are non-dom for SDC until you hit 17 of 20 residency years |
| Domicile tests (origin, choice, deemed) | Origin: at birth; choice: acquired by settling with intent; deemed: resident in Cyprus ≥17 of the past 20 years | Deemed domicile removes SDC exemptions | Non-doms lose status once deemed domiciled; origin in Cyprus can still be non-dom if living abroad ≥20 consecutive years before 16/07/2015 or after acquiring and maintaining a foreign domicile of choice | Maintain records showing domicile of choice abroad or absence of 17/20 residence | Year-checker: count how many of the last 20 tax years you were a Cyprus tax resident; if ≥17, deemed domiciled for SDC |
| Tax residency rules (183-day and 60-day) | 183-day rule or 60-day rule in a calendar year | Establishes residency for income tax and SDC purposes | 60-day rule: ≥60 days in Cyprus, no other country residency, ≤183 days in any other single country, permanent home in Cyprus, and business/employment/office in Cyprus | Tax Registration Number, employer/office-holder evidence, lease or title deed | Day counter: arrivals count as in-Cyprus days; departures count as out; arrive+depart same day = in; depart+arrive same day = out |
| Day-count calculator (practical) | Track days by rule above; use calendar-year totals | If you fail residency, non-dom regime does not apply that year | Keep travel logs, boarding passes, utility bills | Request a Tax Residency Certificate (TRC) from Tax Dept for treaty reliefs | Example: 62 days in Cyprus, 170 in Country A (non-resident there), 20 elsewhere, Cyprus job + rental home = Cyprus resident via 60-day rule |
| Remittance basis vs worldwide taxation | Cyprus does not use a remittance basis | Residents taxed on worldwide income; SDC exemptions apply regardless of remittance | Structure income sources with non-dom SDC relief in mind | Keep source documentation of foreign income | Bringing foreign dividends to Cyprus does not create SDC for non-doms |
| SDC (Special Defence Contribution) overview | SDC applies to Cyprus tax resident individuals who are domiciled | Non-doms are exempt from SDC on dividends, interest, and the rental SDC | Exemption lasts until deemed domicile (17/20) | File non-dom declaration with banks/registrars to stop SDC withholding | If bank withholds SDC on interest by default, submit non-dom proof to reclaim/stop |
| Dividends | Normally 17% SDC for domiciled residents; income tax exempt | Non-doms: 0% SDC on Cyprus and foreign dividends; subject to GHS (GeSY) contributions | No remittance rules; treaty WHT abroad may apply | Provide non-dom status to payers/custodians | Receive €200,000 foreign dividends: SDC 0; GHS 2.65% up to annual cap; no income tax |
| Interest (bank, bonds) | Normally 30% SDC for domiciled residents; income tax exempt (unless trading) | Non-doms: 0% SDC; GHS applies | Passive vs trading interest classification matters for income tax | Non-dom declaration to banks | €50,000 bank interest: SDC 0; GHS 2.65% up to cap |
| Rental income | SDC at 3% on 75% of gross rent for domiciled residents | Non-doms: no SDC on rent; income tax on net rent; GHS applies | Keep expense records to reduce taxable base | Lease agreements; EAC receipts; property tax bills | €24,000 gross rent, €6,000 expenses: taxable €18,000; income tax bands apply; SDC 0; GHS 2.65% on rent |
| Salary (Cyprus employment) | Taxed at progressive rates; first €19,500 is tax-free | Non-dom status does not change income tax on salary; GHS applies | Payroll registration needed | Payslips, employment contract | €60,000 salary: apply first employment 50% exemption if eligible; tax on remaining €30,000 |
| Salary from foreign employer (90-day rule) | If services rendered outside Cyprus to a non-resident employer (or foreign PE of a resident employer) for >90 days in the same tax year, remuneration is exempt | Non-doms can use this to reduce Cyprus income tax | Track days worked abroad per assignment | Employer letter; travel logs | Work 120 days abroad for a non-resident employer: Cyprus exempts that remuneration |
| First employment 50% exemption | From 2022, 50% exemption for “first employment” in Cyprus if annual remuneration ≥€55,000; duration up to 17 years | Reduces income tax on employment income; independent of non-dom SDC rules | Not resident in Cyprus for at least 15 consecutive years before starting; conditions and transitional rules apply | Employer confirmation; Tax Dept ruling if borderline | €100,000 salary → €50,000 taxable; apply progressive rates to €50,000 |
| Personal income tax bands | 0% up to €19,500; 20% €19,501–€28,000; 25% €28,001–€36,300; 30% €36,301–€60,000; 35% over €60,000 | Non-doms use same bands | Optimise split between salary and dividends | Annual return (TD1) | Combine €19,500 salary + dividends: salary taxed 0; dividends SDC-exempt |
| GHS (GeSY) health contributions | 2.65% on most income of individuals up to the annual cap (cap commonly applied around €180,000 of income) | Applies to non-doms on dividends, interest, rents, and salary | Coordinate with payroll and investment flows | Register for GHS; pay via payroll/self-assessment | €150,000 income mix → GHS 2.65% applies across income streams until cap |
| Capital gains | No CGT except on gains from Cyprus immovable property and shares of companies holding such property; gains on “securities” are exempt from income tax | Non-doms benefit the same; SDC not relevant | Define “securities” per Tax Dept circulars | Keep purchase/sale contracts and valuations | Sell foreign shares: no Cyprus tax; sell Cyprus apartment: 20% CGT (allowances may reduce) |
| Foreign-source income and DTAs | Cyprus has 60+ double tax treaties | Treaties can lower foreign WHT; Cyprus gives credit relief | Maintain tax residency to claim treaty benefits | Obtain TRC annually (Tax Residency Certificate) | Dividend from treaty country at 5% WHT; Cyprus SDC 0 for non-dom; no double taxation |
| Corporate tax touchpoints | Corporate rate 12.5%; management and control determines residency of companies | If you manage a foreign company from Cyprus, it may become Cyprus tax resident (CFC/POEM risk) | Avoid central management in Cyprus if not intended; keep governance offshore | Board minutes, signatory logs, travel logs | Don’t sign foreign company contracts while in Cyprus if aiming to keep it non-resident |
| Pensions | Option to tax foreign pension at 5% on amounts over €3,420 per year | Non-doms can elect this regime; SDC not applicable | Annual election; check treaty rules | Proof of pension; election in return | €30,000 foreign pension → €26,580 at 5% = €1,329 tax |
| Wealth, inheritance, gift taxes | None in Cyprus | Non-doms and domiciled residents alike benefit | N/A | N/A | Estate planning relies on foreign rules, not Cyprus |
| Rental property specifics (Cyprus) | Municipal rates, refuse fees may apply; no annual immovable property tax at state level | Taxes unaffected by non-dom except SDC exemption | Budget non-tax charges | Local authority bills | Add 5–10% of rent for local charges in projections |
| Non-dom duration and expiry | Exemptions last until deemed domicile (17 of last 20 years of residency) | After deemed domicile, SDC applies | Plan long-term; consider year-by-year residency | Keep rolling 20-year residency log | Hitting 17th residency year in 2041? SDC starts that year |
| Certificates and confirmations | Tax Residency Certificate (TRC) from Tax Dept; non-dom declaration to banks/brokers; employer confirmations | Needed to access treaty rates and stop SDC withholding | Apply annually for TRC; provide non-dom status to payers | TRC application (e.g., T.D.98), utility bill, lease, employment proof | Bank asks for SDC status: give non-dom declaration + TRC to apply 0% SDC |
| Compliance and filings | Annual personal tax return (TD1), GHS, provisional tax if applicable | Non-doms still file and pay any income tax/GHS due | Register for e-Tax; meet deadlines | Keep records 6+ years | Use a calendar to set reminders for 31 July and 31 December payments |
| Requirements checklist (60-day rule) | 60 days in Cyprus, permanent home (owned/rented), Cyprus business/employment/office, not resident elsewhere, not >183 days in any other single country | Unlocks residency and non-dom SDC benefits | Often satisfied by being a director/employee of a Cyprus company | Employment contract, director appointment, lease | Calculator: Days CY ≥60? Days in any other one country <183? Tax resident nowhere else? If yes to all, proceed |
| Dividends via Cyprus company to non-dom shareholder | Dividends exempt from SDC for non-dom individuals | No SDC, but corporate profits taxed at 12.5% before distribution | Substance and transfer pricing rules apply | Company accounts, audit, tax return | Pay self €19,500 salary + dividends; optimise overall burden |
| Withholding and relief at source | Use treaties and EU directives where applicable | Non-dom gets SDC 0% irrespective of remittance | Provide residency proof to foreign payers | TRC, forms per treaty country | Foreign broker applies 15% WHT instead of 30% on US-source dividends via treaty routing limits; credit rules apply |
| News and policy watch (2025) | UK announced abolition of its non-dom from April 2025; Italy tightening entry; Cyprus non-dom rules unchanged as of today | Cyprus remains attractive for dividend/interest SDC exemption | Monitor MoF circulars and ATAD changes | Subscribe to Tax Dept updates | If other regimes close, timing moves to Cyprus using the 60-day rule becomes critical |
| Common pitfalls | Assuming remittance basis; ignoring GHS; not filing non-dom declaration so SDC is withheld; mixing management of foreign companies from Cyprus | Can lead to unexpected SDC, GHS, or corporate residency risks | Keep clean documentation; separate roles and signings | Board protocols; travel logs; declarations | If you must sign, do it while physically outside Cyprus to avoid POEM issues |
| Simple non-dom calculator (yes/no) | 1) Are you a Cyprus tax resident this year (183 or 60 days)? 2) Have you been a Cyprus tax resident for ≥17 of the last 20 years? 3) Do you have a Cyprus domicile of origin without a qualifying foreign domicile of choice? | If 1=yes, 2=no, then you are non-dom; if 2=yes, deemed domiciled for SDC | Keep answers with dated evidence | Checklist file per year | Output: “non-dom (resident) (non-dom) of Cyprus” or “domiciled resident” |
| FAQs in one line each | Is rental SDC exempt? Yes, for non-doms. Is dividend SDC exempt? Yes. Is interest SDC exempt? Yes. Is there remittance basis? No. Are foreign gains on shares taxed? No. | Clear, simple rules lower errors | Recheck annually | N/A | N/A |
| Terminology note | “Non-domicile” = “non-dom”; sometimes mistyped as “non-micial” in forms/blogs | Use “non-dom Cyprus tax status” consistently | Helps with bank/internal compliance | N/A | N/A |
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