Cyprus Non-Domicile Regime

Priscilla Mifsud-Parker | Published on 22 Oct 2015

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All newcomers to Cyprus who will establish tax residency on the island, should be aware of the newly introduced Cyprus “non-domicile” regime.

Prior to this amendment, Cyprus tax resident individuals earning Cyprus or foreign sourced income in the form of dividends or “passive” interest were subject to Cyprus Special Defence Contribution (“SDC”), which is a tax levied at the rate of 17% on dividends and 30% on interest, irrespective of their domicile status.  The Cyprus non-domicile regime is therefore introducing a very attractive residence destination within the EU which rivals that of other EU countries. 

With this amendment individuals who have non-dom status are no longer subject to SDC making the Cyprus non-domicile regime a strong selling point for Cyprus as a residence destination.

Coupled with the income tax exemptions existing for such income, this amendment means that Cyprus non-domicile regime status holders are exempt from taxation in Cyprus on their dividends and “passive” interest, irrespective of whether such sources of income are earned in Cyprus or abroad.

Furthermore for rental income, whether in relation to immovable property in Cyprus or outside of Cyprus, when having a Cyprus non-domiciled regime status one would only be subject to income tax on rental income and not to SDC also.



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