Denizen Global

60 Days a Year in Cyprus for Tax Residence Status

  • tax cyprus
    July 17th, 2017
    The Government of Cyprus has updated the law regarding Cyprus Income Tax. The law is amended with regards to the definition of “Resident of the Republic” for individuals. The amendment also has an effect on other tax laws to the extent where such laws refer to Cyprus tax resident individuals as these are defined in the Cyprus Income Tax Law.

    Previously the term “resident of the Republic”, when applied to an individual means one who stays in the Republic for a minimum of 183 days in the tax year.

    Thus, the Income Tax Law has been amended so that an individual, who does not remain in any other Country that exceeds 183 days (one or more periods) in the same tax year and who is not tax resident in any other Country for the same tax year, be considered as a tax resident of Cyprus, provided that the following conditions are met:

    • He/she remains in Cyprus for at least 60 days during the tax year.
    • He/she should pursue any business in Cyprus and/or to work in Cyprus and/or to be a director in a company tax resident in Cyprus at any time during the tax year.
    • He/she maintains a permanent residence in Cyprus (owned or rented).

    For the purposes of calculating the days of stay in Cyprus:

    • The day of departure from Cyprus is considered as a day outside Cyprus;
    • The day of arrival in Cyprus is considered as a day in Cyprus;
    • Arrival in Cyprus and departure from Cyprus within the same day is counted as one day in Cyprus;
    • Departure from Cyprus and return to Cyprus within the same day is counted as one day outside Cyprus.
    • Thus, under the new provisions, an incentive is given to an individual who is not a tax resident in any other state for the same tax year to transfer his tax residence to Cyprus and to be taxed only on income from the activities the individual exercises in Cyprus.

    It is clarified that an individual who meets the above conditions is not considered as tax resident of Cyprus in the tax year, if in that year the exercise of any business activity and/or employment in Cyprus and/or the holding of an office to a Cyprus tax resident ends.

    Under the new amendment an individual who is not a tax resident in any other country in the same tax year, will be taxed only on income arising from the business activities exercised in Cyprus. Individuals who are tax residents in Cyprus, but do not reside in Cyprus will be free from special defense contribution, interest and rental income.

    Furthermore, it is taken into account that earnings from employment greater than 100,000 Euro is exempt from tax of 50% of the salary for 10 years.