Taxes and tax residency

Tax is the area where the gap between what is widely repeated and what is actually confirmed is widest. Where popular figures conflict, this guide leaves them out rather than pick one version — and flags each gap in place, so it is clear the figure is genuinely unsettled rather than missed.

There are two independent ways to become a Cyprus tax resident. Meeting either is enough.

The 183-day rule

Physical presence in Cyprus for more than 183 days in a calendar year. No further conditions attach to it.

The 60-day rule

Four conditions, all of which must be met — see below.

The 60-day rule requires all four of:

1. You do not reside in any other single state for more than 183 days in aggregate in the tax year.
2. You reside in Cyprus for at least 60 days in the tax year.
3. You carry on a business in Cyprus, and/or are employed in Cyprus, and/or hold an office in a Cyprus tax-resident company, at any time during the tax year.
4. You maintain a permanent residential property in Cyprus, owned or rented.

Counting days: the day of departure counts as a day outside Cyprus; the day of arrival counts as a day in Cyprus; arrival and departure on the same day counts as one day in Cyprus; departure and arrival on the same day counts as one day outside Cyprus.

The non-dom regime has been open to Cyprus tax residents since the 2016 tax year. It rests on the combined operation of the Income Tax Law, the Special Defence Contribution (SDC) Law and the Wills and Succession Law.

What it exempts: a Cyprus tax resident who is non-domiciled is exempt from SDC on dividends, interest and rental income. Since the 2026 reform independently abolished SDC on rents for everyone, the practical value now sits in dividends and interest.

The 17-year limit: an individual who has been a Cyprus tax resident for 17 out of the last 20 years becomes *deemed domiciled* and loses the exemption.

Non-dom status is declared on Form TD 38, filed the first time you earn SDC-relevant income, and the Tax Department issues a non-domicile certificate. That procedural detail is widely reported; confirm the exact form when you file.

Bands for the 2026 tax year onwards:

For comparison, the 2025 bands — still relevant for the return you file in 2026 — were: nil to €19,500; 20% to €28,000; 25% to €36,300; 30% to €60,000; 35% above that. The reform raised the tax-free threshold from €19,500 to €22,000 and widened every band.

Exemptions for new residents taking up first employment. The figures that looked contradictory online are actually three separate regimes that coexist — you claim whichever one you qualify for, and only one:

A senior hire over €55,000 takes the 50%/17-year relief; someone on €30,000–55,000 takes the 25% "brain gain" if they qualify, otherwise the 20%. The 50% and the 25%/20% reliefs are mutually exclusive. Confirm your eligibility with an accountant — the thresholds and prior-non-residency tests are strict.

Dividends. SDC on dividends dropped from 17% to 5%, applying to profits earned from 1 January 2026.

• Deemed dividend distribution SDC is abolished for profits from 2026 onwards; DDD on undistributed 2024–2025 profits continues until 31 December 2027.
• SDC on rental income is abolished entirely.
• "Disguised dividends" are taxed at 10%.
• SDC on bond interest is 3%.
• Dividends paid by Cyprus companies to non-resident shareholders remain subject to no SDC and no domestic withholding tax.

We have not published the SDC rate on ordinary, non-bond interest for domiciled individuals from 2026 — no source we checked stated it. For a non-domiciled resident the question is moot, since the non-dom exemption covers interest entirely.

Crypto. The Income Tax (Amending) (No. 4) Law of 2025 introduced Article 20E, taxing gains on the disposal of crypto-assets at a flat 8% from 1 January 2026, for individuals and companies alike. "Crypto-asset" takes its definition from Regulation (EU) 2023/1114 (MiCA). Losses on crypto disposals can be set off only against crypto gains and only within the same tax year — no carry-forward, no group relief. Employee stock options under approved employer schemes are likewise taxed at a flat 8%.

What counts as a disposal — and what does not — is the question that decides the outcome, and firm analyses agree on the split:

• Selling for fiat, spending crypto, or swapping one crypto for another — all disposals, taxed at 8%.
• Mining income — not 8%; ordinary income when received (progressive up to 35%, or 15% corporate).
• Staking rewards and DeFi yield — not 8%; ordinary income at market value on receipt, and the later sale of those tokens is then a separate 8% disposal.

The 8% is domicile-independent — non-dom status does not change it. Non-dom only removes the SDC on dividends if you extract crypto profits from a Cyprus company.

From 1 January 2026 the standard corporate income tax rate is 15%, up from 12.5%, aligning Cyprus with the OECD Pillar Two global minimum. Alongside it: tax loss carry-forward extended from five to seven years, a 20% super-deduction for R&D expenses for 2025–2030, and the abolition of the stamp duty law.

Social insurance and health contributions, per PwC (last reviewed 18 May 2026):

The authoritative source for basic insurable earnings and the self-employed categories is the Social Insurance Services site; confirm the €68,904 cap there before relying on it. Employer contributions to the Redundancy, Industrial Training and Social Cohesion funds are additional and not covered here.

Other taxes. Capital gains tax is 20% on gains from disposals of Cyprus-situated immovable property, with lifetime exemptions from 1 January 2026 of €150,000 for a private principal residence, €50,000 for agricultural land held by farmers and €30,000 for other disposals — subject to an overall lifetime maximum of €150,000. Property transfer fees run 3–8% of market value, plus an immovable property transfer levy of 0.4% of disposal proceeds. VAT is 19% standard, with reduced rates of 9%, 5% and 3%.

Cyprus–Russia. From the Cyprus side the treaty remains on the Ministry of Finance's official list: signed 5 December 1998 (in force 17 August 1999), amending protocol 7 October 2010 (in force 2 April 2012), further protocol 8 September 2020 (in force 15 January 2021). There is no suspension note against Russia on the Cyprus list.

On 8 August 2023 the President of the Russian Federation issued Decree No. 585, unilaterally suspending specified provisions of tax treaties with 38 states, Cyprus among them. For this treaty the suspended articles are reported as 5–22, 24, 27 and 29. The practical effect: Cyprus entities receiving Russian-source dividends, interest, royalties and other income no longer get the treaty's reduced withholding rates, and Russian domestic rates apply.

Cyprus–Israel: there is no treaty. The Ministry of Finance's official table of 72 double tax treaties has no Israel entry — between Ireland and Italy there is none; Iceland, India and Iran are present, Israel is absent.

There is a non-obvious consequence, and it is worth understanding rather than skipping. The 2026 change to the 60-day rule works by pushing dual-residence conflicts onto the tie-breaker article of the applicable treaty. If no treaty exists, there is no tie-breaker article — so relief from double taxation has to be found in each country's unilateral domestic rules instead. For someone moving between Cyprus and Israel, that makes the 2026 liberalisation considerably less useful than it is for people from treaty countries. This is an inference from two established facts, not a rule stated anywhere; it is exactly the point on which to take professional advice.

The official table is actively maintained — it carries a Hong Kong entry dated 12 June 2026 and a Sweden protocol dated 3 July 2026 — so it is a reliable place to check a specific country yourself. Cyprus–Oman took effect 1 January 2026; Cyprus–Curaçao takes effect 1 January 2027.