Cyprus Non-Domicile status offers one of the most attractive tax regimes in the EU: zero tax on dividends, zero on interest income, and zero capital gains tax on securities — for up to 17 years. This guide explains exactly who qualifies, how to apply, and what it means for property buyers.
What is Cyprus Non-Dom Status?
Cyprus introduced the Non-Domicile (Non-Dom) regime in 2015 as part of a broader effort to attract high-net-worth individuals and entrepreneurs. A "non-domiciled" tax resident pays full Cyprus income tax on employment and business income but is completely exempt from the Special Defence Contribution (SDC) — the tax that applies to dividends, interest, and rental income.
The Key Tax Benefits
| Income Type | Standard Rate (Domiciled) | Non-Dom Rate |
|---|---|---|
| Dividends | 17% SDC | 0% |
| Interest Income | 30% SDC | 0% |
| Capital Gains (Securities) | 0% (already exempt) | 0% |
| Employment Income | 0–35% PIT | 0–35% PIT |
| Capital Gains on Property | 20% CGT | 20% CGT |
Important: Capital gains on the sale of property (not securities) are subject to 20% CGT regardless of domicile status. Capital gains on shares and other securities remain exempt for all Cyprus tax residents.
Who Qualifies for Non-Dom Status?
To qualify as a Non-Dom in Cyprus, you must:
- Become a Cyprus tax resident — spend more than 183 days in Cyprus per calendar year, or qualify under the "60-day rule" (see below)
- Not be domiciled in Cyprus — either by origin (you were not born to a Cypriot father with domicile of origin in Cyprus) or by choice (you have not lived in Cyprus for 17+ out of the last 20 years)
Non-Dom status can be maintained for a maximum of 17 years after which you become domiciled by choice.
The 60-Day Rule: Easier Than You Think
Since 2017, Cyprus has offered an alternative route to tax residency for individuals who do not spend 183 days in Cyprus. Under the 60-day rule, you qualify as a Cyprus tax resident if you:
- Spend at least 60 days in Cyprus in the tax year
- Do not spend more than 183 days in any single other country
- Are not a tax resident in any other country
- Have a business connection or employment in Cyprus (including directorship of a Cyprus company)
- Own or rent a permanent home in Cyprus
This makes Cyprus Non-Dom status accessible to entrepreneurs who split their time across multiple countries.
What You Need to Do
Step 1: Establish Cyprus Tax Residency
Rent or purchase a permanent home in Cyprus. If using the 60-day rule, ensure you have a Cyprus company, employment contract, or another qualifying economic connection.
Step 2: Register with the Cyprus Tax Department
Apply for a Tax Identification Number (TIC) at the Tax Department office or online. You will need your passport, proof of address in Cyprus, and proof of your economic connection.
Step 3: File a Declaration of Domicile Status
Submit a declaration confirming you are not domiciled in Cyprus. Your accountant or tax advisor can prepare this. Once approved, you will be treated as Non-Dom for SDC purposes from the current tax year.
Non-Dom and Property Investment
For property investors, Non-Dom status offers a compelling package. While you will pay capital gains tax on property disposals (20%), there is no SDC on rental income — meaning you only pay income tax at the personal income tax rates (which include a €19,500 annual exemption before any tax is due).
A typical rental income scenario: an investor earning €30,000/year in net rental income pays approximately €3,250 in Cyprus income tax — an effective rate of ~10.8%. Under standard SDC rules for a domiciled resident, rental income also attracts 3% SDC on top of income tax.
The Comparison: Cyprus vs UK, Germany, France
- UK: Dividend tax 8.75–39.35%; CGT on securities 10–20%
- Germany: Capital gains tax 25% + solidarity surcharge; dividend withholding 25%
- France: Flat tax (PFU) 30% on dividends and capital gains
- Cyprus Non-Dom: 0% on dividends, 0% on securities gains
How VELORÉ Can Help
Establishing Non-Dom status begins with finding the right property in Cyprus. VELORÉ matches international buyers with licensed local agencies who understand the expat market — ensuring you find a property that satisfies the residency requirement while delivering the lifestyle you are looking for.
Note: This article is for informational purposes only and does not constitute tax advice. Consult a licensed Cyprus tax advisor for your specific situation.