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Cyprus Tax Resident individual,

Cyprus Tax Resident individual, "60 days rule".

21 August 2017 Tax Law

On July 14th 2017, the Parliament of Cyprus unanimously approved a bill that allows an individual to acquire Cyprus tax residence by staying at least 60 days in Cyprus per year.

Under the “60 day rule”, which became effective on January 1st, 2017, an individual is considered a Cyprus tax resident if he/she satisfied all of the following criteria;

  1. remain in Cyprus for at least 60 days during the tax (calendar) year;
  2. not be a tax resident of any other State or remain in any other State for a period/s exceeding 183 days in respect of the year in question;
  3. maintain a permanent residence in Cyprus, which can be either owned or rented by him;
  4. Carry out business activities in Cyprus or have employment in Cyprus or be a director in a company that is tax resident in Cyprus at any time during the tax year in question.

Subsequently, under the “60 day rule” high earning individuals who are not tax residents in any other country for the same tax year can transfer their tax residence to Cyprus and be taxed only on income from the activities the individuals’ exercises in Cyprus, provided the above criteria are fulfilled.

Nevertheless is to be noted that although an individual may satisfied all of the aforementioned conditions, he/she may not be considered as a Cyprus tax resident if his/her business and/or employment in Cyprus and/or position in a Cyprus tax resident have been ceased.

Important tax benefits under the “60 day rule”

  • A Cyprus tax resident but non-domiciled in Cyprus has full exemption from taxation in Cyprus on his/her worldwide dividend and ‘passive’ interest income;
  • Income from employment carried out outside Cyprus is exempted from Cyprus income tax, provided that the employment exercised outside Cyprus exceeds 90 days per tax year;
  • Employees who exercise employment in Cyprus with annual remuneration in excess of €100,000 they enjoy 50% exemption on their earnings in Cyprus, for a period of 10 years, provided that they have not been a tax residents of Cyprus prior to the commencement of their employment.

How to calculate the days of residency in Cyprus?

  • The day of departure from Cyprus is considered as a day outside of Cyprus;
  • The day of arrival in Cyprus is considered as a day in Cyprus;
  • Arrival in Cyprus and departure from Cyprus within the same day is considered as one day in Cyprus;
  • Departure from Cyprus and return to Cyprus within the same day is considered as one day outside of Cyprus.

 For more infomration of how you can benefit from the new "60-days rule" regime, please contact us.