CYPRUS TAX RESIDENCY
A two-scheme Pathway Towards Cypriot Tax Residency
Cyprus adheres by a residency-based approach in which an individual's tax residence is determined by whether or not the individual has been physically present in the country. Specifically, tax residencies are granted under 2 different schemes: the 183-day rule or the 60-day rule.
THE 60-DAY RULE
Cyprus Tax Residency Under the 60-day Rule
In the case that an individual does not remain in any other country for more than 183 days in the same tax year, they are considered to be a tax resident of Cyprus for that year once all the following requirements are met:
- In the tax year the individual spends at least 60 days in Cyprus.
- Throughout the tax year, engages in a Cyprus-based business or is employed by a Cyprus-based firm.
- A permanent residence in Cyprus is maintained (by owning or leasing) by way of this option.
In the event of an individual who qualifies for tax residency based on the above criteria but is no longer engaged in any form of business or job in Cyprus, or holds an office with a tax resident person in Cyprus it is important to be aware that the legislation is further revised to specify that they will no longer be considered a Cyprus tax resident for that year.The number of days spent in Cyprus should be determined as follows:
- Day of departure is considered a day outside of the Republic.
- The day of arrival is considered to be a day in the Republic; thus, it is counted as such.
- A day in the Republic is defined as a person's entrance and departure from the Republic on the same day.
- The day on which a traveler leaves the Republic and returns is counted as a day outside the Republic.
THE 183-DAY RULE
Cyprus Tax Residency Under the 183-day Rule
Under the 183-day rule, an individual is required to physically reside within the island for over 183 days of the tax year in order to be attributed with a Cypriot tax residency. On the other hand, a non-resident of Cyprus will be regarded as non-tax resident in the case they fail to be physically present in the country for over 183 days throughout the tax year.
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