The Cyprus Non-Domicile Tax Residence program, also known as the Cyprus Non-Dom regime, allows foreign residents to live in Cyprus without paying tax on worldwide passive income, such as dividends and interest, for up to 17years. This regime can be beneficial for expats, investors, and business owners to help them reduce their taxes. To qualify, you first have to become a tax resident, meaning you must spend 183 days or 60 days a year in Cyprus and not be considered domiciled, i.e., you weren’t born and haven’t lived in Cyprus for 17 of the last 20 years.
This article will explain everything you need to know about the Cyprus Non-Domiciled tax regime, the tax benefits, how to qualify, how to verify your non-dom status, and more.
Cyprus Non-Domiciled Tax Residence: Key Takeaways
What is Cyprus Non-Dom Tax Residence?
The Cyprus Non-Domiciled Tax regime also referred to at Cyprus Non dom regime, allows foreign nationals who are not considered domiciled in Cyprus, but are tax residents in the country, to take advantage of the tax exemptions from the Special Defence Contribution (SDC) for up to 17 years, with the possibility to extend for two five year periods at an extra cost of €250,000 per period. This regime was introduced in 2016 through a collaboration of the Cyprus Income Tax Law, the Special Defence Contribution (SDC) Law, and the Wills and Succession Law, which together regulate income taxation, investment income, and estate planning in Cyprus.
Tax Residency Rules in Cyprus
The 183-day rule
Under the 183-day rule, you are considered a Cyprus tax resident if you spend more than 183 days in Cyprus within a single calendar year. The days do not need to be consecutive, and even a partial day in Cyprus can count as a full day. This rule is simple and does not need any additional conditions, such as having a home or employment in Cyprus. Once the minimum days are met, the person is automatically treated as a tax resident for that year, regardless of where their income is earned or whether they maintain ties to other countries. This rule primarily applies to people living in Cyprus on a long-term or full-time basis.
The 60-day rule
The 60-day rule is a special provision for internationally mobile people who do not spend enough time in a single country to become tax residents somewhere else. These individuals need to meet these conditions to be treated as tax residents in Cyprus.
- Spend at least 60 days in Cyprus during the calendar year
- Must not be a tax resident in another country or spend more than 183 days in any other country.
- Must have a permanent residence in Cyprus, such as a rented or owned home
- Maintain economic ties, such as employment, business activity, or hold a directorial position in a Cypriot company, throughout the year.
How to Calculate Days of Residency in Cyprus
It might not be common knowledge for most people how the 183-day rule is calculated. But it is important to keep track of all the days spent in a country for tax residency purposes.
Therefore, in Cyprus, the day you arrive is counted as a full day, while the day you leave is counted as a day outside the country. If you arrive and depart on the same day, that day counts as one day in Cyprus. In contrast, if you leave and return on the same day, it is counted as one day outside Cyprus.
These are the rules for calculating the days of residency:
- The day of arrival counts as a full day in Cyprus.
- The day of departure counts as a day outside Cyprus.
- If you arrive and leave on the same day, it counts as one day in Cyprus.
- If you leave and return on the same day, it counts as one day outside Cyprus.
- All calculations are based on the calendar year, meaning from January 1 to December 31.
Cyprus Non-Dom Tax Residence Benefits
- 0% SDC on dividends and interest: Those with a verified non‑dom status and who are also non-resident tax residents are fully exempt from the Special Defence Contribution (SDC) on dividends, interest, and rental income from anywhere in the world. This is the biggest advantage of the non‑dom regime, even after the 2026 reforms.
- SDC dividend rate lower for domiciled residents: Domiciled individuals now pay 5% SDC on dividends, which went down from 17%. But non‑doms still pay 0% as long as they qualify for the regime.
- Non-dom regime period with extension option: The new tax changes in Cyprus came with an opportunity to extend the SDC regime. The non‑dom SDC exemption lasts for 17 years. After that, non‑domiciled people have the option to extend it for up to two five‑year periods by paying a lump sum of €250,000 per period.
- No tax on most capital gains: Gains from selling securities such as shares, bonds, etc., are still tax‑free. Capital gains tax in Cyprus is only charged when you sell property located in Cyprus, or sell shares that mainly get their value from that property.
- No wealth, inheritance, or gift taxes: Cyprus does not charge a separate wealth tax, inheritance tax, or gift tax, which is a great benefit for wealth preservation and estate planning.
- Salary tax relief for new residents: New tax residents in Cyprus, including non-doms, can get a 50% income tax break on their salary if they earn over €55,000. This benefit can last for up to 17 years and is created to attract expats who were not living in Cyprus before starting a job.
- Low tax on foreign pension income: Foreign pension income can be taxed at a flat rate of 5% on amounts exceeding €5,000 per year.
- Reduced social insurance/GHS contributions: While SDC does come with many exemptions, non‑doms still have to pay contributions to the General Healthcare System (GHS) and social insurance. However, a reduced or capped treatment may apply based on income and specific employment circumstances.
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Cyprus Golden Visa, and speak to our legal professionals on how to gain permanent residency and maximise your taxes.
How is domicile defined in Cyprus?
Domicile is defined under the Wills and Succession Law as having a permanent home in Cyprus or the intention to live there indefinitely. Domicile can be either a “domicile of origin”, which you have from birth, or a “domicile of choice”, which you acquire by moving to Cyprus with the intention of making it your permanent home. A person is considered domiciled in Cyprus if they have been a tax resident for 17 out of the last 20 years.
| Type of Domicile | What does it mean? |
|---|---|
| Domicile of Origin | This means domicile is recieved from birth |
| Domicile of Choice | It is acquired by living in Cyprus with the intention of permanent residence. |
| Deemed Domicile | This is given to people who have been tax residents in Cyprus for 17 of the last 20 years. |
How do you verify non-dom status in Cyprus?
To qualify for the non-dom status, you must first meet the Cyprus non-dom residence requirements. This means you must first be a tax resident under the 183-day or 60-day rule. Then, to apply for your non don status you must:
- Formally file the declaration of non-domiciled status with the Cyprus Tax Department using Form T.D. 38.
- Submit the supporting documents, which include:
- A passport showing you were not born in Cyprus
- A birth certificate
- Proof of residence or address in Cyprus
- Evidence of your foreign domicile of origin
- Register for your TIC (Tax Identification Code)
The Tax Commissioner will review your application and issue an official confirmation letter once approved, within 2–3 weeks. Once you have received the formal confirmation, you will be eligible for the Cyprus non-dom taxation benefits.
Establishing residency in Cyprus
You can also gain residency through programs like the Cyprus Golden Visa, which directly leads to permanent residency, or the Cyprus Digital Nomad Visa, which first grants you a one-year residence permit that is renewable. Permanent residency will be possible after five years of legal residency. However, applicants will only qualify if they also become Cyprus tax residents and meet the non-dom criteria.
Things can be easier by working with a Cyprus immigration lawyer at Global Citizen Solutions. They will help you plan your taxes correctly with a qualified tax expert and a legal professional who will guide you through your Visa applications. This gives the advantage of enjoying the full range of Cyprus taxes benefits that come with gaining long-term residency in Cyprus.
Tax Exemptions for Non Domiciled Individuals People in Cyprus
Income tax exemptions
Under the Cyprus income tax law, anyone who is a tax-resident, including both domiciled and non-domiciled persons, is exempt from paying income tax on dividends received and on interest from loans or similar debt instruments. Carried interest is treated differently. These exemptions exist because the income is instead taxed through the Special Defence Contribution (SDC), which runs alongside the regular income tax system.
However, from 1 January 2026, SDC no longer applies to rental income for any Cyprus tax residents and non-doms. Rental profits are subject only to standard income tax. But non-soms are still exempt from SDC on dividends, interest, and rental income.
Special Defence Contribution (SDC) exemptions
- The standard SDC exemption lasts for 17 years from the date a person becomes a tax resident.
- After 17 years, for two five-year periods, at €250,000 for each period
- Additionally, those who are non-dom but then become domiciled under Cyprus rules may be eligible to pay a fixed annual SDC of €50,000 regardless of their income.
- Non-soms are exempt from dividends, interest, and rental income.
Lump-sum rules: The lump-sum payment cannot be used to reduce other taxes and cannot be refunded. Once it is paid, it fully covers all SDC obligations for the five-year period, and you cannot claim any foreign tax credits against it.
How Can Global Citizen Solutions Help You?
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