Cyprus is one of the most tax-efficient jurisdictions in Europe. This guide explains how tax residency works, what the Non-Dom regime offers, income tax rates, the 12.5% corporate tax and the key double tax treaties in 2026.
How to become a Cypriot tax resident
There are two routes to Cypriot tax residency:
183-day rule: Spend more than 183 days per calendar year in Cyprus. This creates automatic tax residency.
60-day rule (introduced 2017): You become a Cyprus tax resident if all of the following apply:
- You are in Cyprus for at least 60 days during the tax year
- You are not a tax resident in any other country
- You are not resident in any single country for more than 183 days in the same year
- You have a defined connection to Cyprus: a permanent home (owned or rented), a business registered in Cyprus, or employment with a Cyprus company
Non-Domicile status
Cypriot tax residents who qualify as Non-Dom are exempt from the Special Defence Contribution (SDC):
- Dividends: 0% (standard SDC rate is 17%)
- Interest income: 0% (standard SDC rate is 30%)
- Rental income from overseas: 0% (standard SDC rate is 3%)
Non-Dom status lasts 17 consecutive years from the date of becoming a Cypriot tax resident, provided you were not a Cyprus domicile for the preceding 20 years. In practice, dividends from foreign companies are effectively taxed at 0% for Non-Dom residents.
Income tax rates (2026)
- €0 – €19,500: 0%
- €19,501 – €28,000: 20%
- €28,001 – €36,300: 25%
- €36,301 – €60,000: 30%
- Above €60,000: 35%
Corporate tax
Flat 12.5% on net profits — one of the lowest rates in the EU. Under the IP Box regime, qualifying intellectual property profits may be taxed at an effective rate of 2.5%.
Other advantages
- No inheritance or estate tax
- No wealth tax
- No capital gains tax on disposal of securities (shares, bonds)
- Capital gains tax on Cyprus real estate: 20% (with significant exemptions for primary residences)
- No exit tax
Double tax treaties
Cyprus has signed over 65 double tax treaties, including with Russia, the United Kingdom, Germany, the UAE, India and China. This makes Cyprus effective for international business structuring.