Cyprus — Non-Domicile Status

|---| | Country | Cyprus | | Non-dom benefit | Exempt from Special Defence Contribution (SDC) on dividends and interest | | SDC rate (domiciled residents) | 17% on dividends; 30% on interest | | SDC rate (non-dom residents) | 0% — fully exempt | | CGT on securities | None — Cyprus has no CGT on shares/bonds | | CGT on Cyprus immovable property | 20% on gain | | Primary legislation | Assessment and Collection of Taxes Law; Special Defence Contribution Law | | Tax authority | Tax Department (taxdept.mof.gov.cy) | | Verified by | Pending — Cyprus tax adviser sign-off required |

---

Section 2 — What is Non-Dom Status?

Under Cyprus law, a non-domiciled individual is a person who:

1. Has their domicile of origin outside Cyprus (i.e. born to a non-Cypriot-domiciled father), AND
2. Has NOT resided in Cyprus for 17 or more of the preceding 20 years

The key test is the 17 out of 20 years rule. A foreign national who has lived in Cyprus for fewer than 17 of the last 20 years qualifies as non-dom.

Domicile of choice: Even if someone has lived in Cyprus long enough to acquire a domicile of choice, they will be treated as non-dom for tax purposes until they have lived in Cyprus for 17 of the last 20 years.

---

Section 3 — SDC Exemption: The Main Benefit

The Special Defence Contribution (SDC) is a Cyprus-specific levy. Non-dom individuals are completely exempt from SDC.

For domiciled Cyprus tax residents, SDC applies:

Income type	SDC rate (domiciled)	SDC rate (non-dom)
Dividends (from Cyprus or foreign companies)	17%	0%
Interest income	30%	0%
Rental income (notional 75%)	3%	0%

This is the primary advantage of non-dom status — a high-net-worth individual receiving significant dividend or interest income pays zero SDC.

---

Section 4 — Capital Gains: No CGT on Securities

Cyprus does NOT levy capital gains tax on disposals of shares, bonds, or other securities — regardless of whether the individual is domiciled or non-domiciled, resident or non-resident.

This applies to:

• Cyprus company shares
• Foreign company shares
• Investment funds / collective investment schemes

Exception: CGT applies to the disposal of immovable property in Cyprus at 20% on the gain (after indexation allowance and lifetime exemption of €17,086).

---

Section 5 — Cyprus Tax Residency

Non-dom status is only beneficial if the person is also a Cyprus tax resident (to benefit from zero SDC).

Cyprus tax residency options:

1. 183-day rule: physically present in Cyprus for >183 days in a calendar year
2. 60-day rule (since 2017): present in Cyprus for at least 60 days in the year AND:
   • Not resident in any other country for >183 days
   • Not deemed tax resident elsewhere
   • Has business/employment/holding company in Cyprus
   • Maintains a permanent residence in Cyprus (owned or rented)

---

Section 6 — Income Tax Rates (Cyprus Resident)

Chargeable income (EUR)	Rate
0 – 19,500	0%
19,501 – 28,000	20%
28,001 – 36,300	25%
36,301 – 60,000	30%
Above 60,000	35%

Non-dom individuals pay income tax at the same rates as domiciled residents. The advantage is only on SDC.

---

Section 7 — Sources

• Special Contribution for Defence Law (Cap. 117)
• Income Tax Law, Cap. 118
• Cyprus Tax Department: taxdept.mof.gov.cy

Working paper only. Domicile determination is fact-specific. The 17-of-20-years test requires careful counting of years of Cyprus residence. Obtain formal confirmation from a Cyprus tax adviser.