Cyprus tax residency: the 60-day rule and the non-dom regime

Two ways to become Cyprus tax resident

The 183-day rule. You are tax resident if you spend more than 183 days in Cyprus in the calendar year. Nothing else is required.

The 60-day rule. You are tax resident if, in the same tax year, you meet all four conditions:

1. You spend at least 60 days in Cyprus.
2. You do not spend more than 183 days in any other single country.
3. You carry on a business in Cyprus, are employed in Cyprus, or hold a directorship in a company that is tax resident in Cyprus, and it is not terminated during the tax year.
4. You keep a permanent residence in Cyprus, owned or rented.

The rule was designed for internationally mobile people: entrepreneurs who travel, spend time in several countries and do not reach 183 days anywhere.

What changed in 2026

Until 31 December 2025 there was a fifth condition: you had to show that you were not tax resident in any other country. That was often the hardest part to prove. The 2026 reform removed it.

You can now qualify under the 60-day rule even if another country also treats you as resident under its own rules. In that case, the double tax treaty between the two countries applies its tie-breaker rules: permanent home, centre of vital interests, habitual abode and nationality, in that order. Being careful about where your home and your family are still matters.

The non-dom regime

Cyprus taxes dividends and interest through the Special Defence Contribution, separately from income tax. This contribution only applies to people who are both tax resident and domiciled in Cyprus. If you are resident but not domiciled, you are non-dom and pay:

You are non-dom if you do not have a Cypriot domicile of origin. You become deemed domiciled once you have been tax resident in Cyprus for 17 of the last 20 years.

Extending it beyond 17 years

Since 2026, people who have become deemed domiciled can keep the exemption by paying €250,000 for each five-year period, upfront, with a maximum of two extensions. The election is irrevocable and the payment is not refunded. Timing matters: the Tax Department's Circular 2/2026 required people who became deemed domiciled in 2024, 2025 or 2026 to apply by 30 June 2026.

Income tax for new residents

Salaries, director's fees and business profits are subject to income tax: 0% up to €22,000, then 20%, 25%, 30% and 35% above €72,000. Two exemptions help newcomers in a first employment in Cyprus:

• 50% exemption on remuneration above €55,000 a year, for 17 years, if you were not tax resident in Cyprus for the previous 15 consecutive years.
• 20% exemption, up to €8,550 a year, for seven years, if you were not resident in the previous three years and were employed abroad by a non-resident employer.

A typical set-up for an owner

The most common structure for a business owner moving to Cyprus combines three pieces: a Cyprus company with real management on the island, the owner as a director, which meets the business condition of the 60-day rule, and a rented or owned home. The company pays 15% on its profit and distributes dividends to the owner, who as a non-dom pays no defence tax on them, only the 2.65% GESY contribution.

The details depend on the company you set up in Cyprus and on the rules of the country you are leaving. Before anything, check your exit tax. Non-EU nationals can secure the right to live in Cyprus with permanent residency from €300,000.

This guide is general information, not tax or legal advice. Every case needs individual analysis.