🇨🇾Cyprus · Taxes
Cyprus — Taxes
Full guide to Cyprus taxes for expats: Non-Dom SDC exemption, 60-day residency, PIT bands, 0 % CGT on shares, crypto under Art 20E, Russia DTT suspension.
Cyprus posts a 35 % top rate on employment income and 0 % on dividends, simultaneously, for the same person, under the Non-Dom regime. Understanding which box your income falls into is the whole game.
The paradox: 35 % and 0 % in the same tax return
On paper Cyprus looks like a high-tax country. The personal income tax schedule climbs to 35 % above € 60,000, in line with western European peers. Yet tens of thousands of entrepreneurs, fund managers, and holding-company owners pay an effective rate in the low single digits, legally, without structures, often on their personal return.
The reason is a two-layer architecture. The first layer (PIT) applies to employment income, self-employment, and rental. The second layer (the Special Defence Contribution, or SDC) applies to dividends, interest, and passive income. Non-Dom residents are fully exempt from the second layer. GESY, the national health contribution, is the only cost left on passive income.
This is not a loophole awaiting closure. The Non-Dom regime has existed since 2015 and was reaffirmed with no material changes through 2026. It is structurally embedded in Cyprus income-tax law, and it is why Cyprus has become the EU jurisdiction of choice for holding-company owners, digital entrepreneurs, and high-dividend investors.
Non-Dom status: who qualifies and what it exempts
Non-Dom is not applied for; it is assessed automatically each tax year. An individual qualifies if they have not been treated as Cyprus-domiciled for more than 17 out of the last 20 years, and if their domicile of origin (in the common-law sense) is outside Cyprus.
The practical read: if you were not born in Cyprus and have not lived there cumulatively for 17 or more years, you qualify. First-generation relocators qualify on arrival. The status then lasts indefinitely as long as the 17-of-20 threshold is not crossed.
What Non-Dom exempts
Non-Dom residents pay 0 % SDC on dividends and interest. The alternative, applicable to long-domiciled Cyprus residents, is 17 % SDC on those same flows. On a dividend-heavy income of, say, €400,000 a year, the Non-Dom exemption saves over €60,000 in SDC alone.
The only contribution that applies to Non-Dom residents on dividend and interest income is GESY at 2.7 %, with an annual ceiling of € 4,770 for that category. Beyond the cap, additional dividends or interest carry zero further contribution.
- Dividends (Non-Dom)
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- Interest (Non-Dom)
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- Employment income
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- Capital gains (shares)
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- Capital gains (property)
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- Crypto — active (from 2026)
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- Crypto — passive
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Rental income from Cyprus property is subject to SDC at 17 % regardless of Non-Dom status (only dividends and interest are sheltered). Foreign rental income is outside the SDC scope.
Qualifying for tax residency in 60 days
The default residency test is 183 days of presence in Cyprus within a calendar year. A second test, the 60-day rule, allows earlier qualification. Both routes produce the same tax-residency status and Non-Dom eligibility.
The five-part 60-day test
- Physical presence in Cyprus of at least 60 days during the calendar year.
- No tax residency in any other country during that year.
- Not present in a single other country for 183 or more days in the same year.
- A Cyprus address (owned or rented) that is maintained and available to you.
- A business, employment, or directorship nexus in Cyprus: running a Cypriot company, being employed by one, or serving as a company director.
All five conditions must be met simultaneously. Failing any single one reverts you to the 183-day test, which you then may or may not satisfy depending on your travel log.
Obligations that follow residency. As a Cyprus tax resident you must register with the Tax Department (obtain a TIC, the Tax Identification Code), file an annual IR1 personal tax return, and maintain a local account for tax refunds or payments. The annual IR1 deadline is typically July 31 of the following year (electronic filing). GESY contributions are payable quarterly for dividend income.
The 60-day count excludes same-day trips. Day of arrival and day of departure each count as one Cyprus day. Maintain a travel diary; the Tax Department may request it as part of residency verification.
PIT on employment and self-employment income
Employment income, directorship fees, self-employment profit (net of deductible expenses), and trading income are subject to the progressive PIT schedule. Non-Dom status provides no exemption here.
- 0 % on income up to € 19,500
- 20 % on € 19,500–€ 28,000
- 25 % on € 28,000–€ 36,300
- 30 % on € 36,300–€ 60,000
- 35 % on income above € 60,000
The practical upshot: a director of a Cyprus company who draws a modest salary and takes the bulk of their return as dividends pays PIT only on the salary tranche, and 0 % (Non-Dom) on the dividends. Many owners optimise by keeping the salary below € 19,500, staying in the zero band entirely, and distributing profits as dividends subject only to GESY.
Deductions available against employment income include provident fund contributions (up to 1/6 of emoluments), life insurance premiums (up to 7 % of insured sum), and approved research-and-development expenditure. Social insurance (employee share) is deductible. GESY itself is not deductible against PIT.
Foreign employment income. Cyprus taxes residents on worldwide income. If you are employed by a foreign employer and physically perform work partly outside Cyprus, the "90-day rule" exempts remuneration attributable to non-Cyprus workdays where the employer is a foreign resident. A DTT tie-breaker may further limit Cyprus tax where a treaty applies.
Capital gains: shares at 0 %, property at 20 %, crypto post-2026
Shares and securities
Cyprus does not tax capital gains on shares, securities, or any financial instruments. The exemption covers listed and unlisted shares, bonds, fund units, and derivatives, regardless of whether the underlying company is Cypriot or foreign. This is one of the most complete capital-gains exemptions in the EU.
Immovable property
The one carve-out is Cyprus immovable property. Gains on the sale of land or buildings situated in Cyprus are taxed at 20 %. A lifetime exemption of €85,430 applies to gains from the sale of a primary residence. Offshore immovable property is not within Cyprus CGT scope (a DTT or local tax in the source country may apply).
Cryptocurrency
From 1 January 2026, Cyprus introduced Article 20E of the Income Tax Law, which subjects gains from active cryptocurrency trading to a flat rate of 8 %. The test for "active trading" looks at frequency, scale, and whether the activity constitutes a systematic commercial undertaking.
Passive crypto investment (buying and holding without systematic trade activity) is not caught by Article 20E and remains at 0 % in Cyprus, in line with the general shares/securities exemption. Pre-2026 gains, even from active trading, fall under the prior rules (0 %).
The GESY and SDC treatment of crypto gains is still being clarified by the Tax Department. Conservative guidance treats active-trading gains under Article 20E as income and applies GESY; passive gains remain outside both GESY and SDC.
DTT network, Russia suspension, CFC rules, and exit
Double-tax treaty network
Cyprus has approximately 65 active DTTs, covering most major economies: UK, Germany, France, the US (via the FATCA regime though no formal DTT exists), UAE, India, China, and most EU member states. Treaty benefits include reduced withholding tax rates on dividends, interest, and royalties routed through Cyprus.
Russia DTT — suspended August 2023
Russia suspended substantive provisions of the Cyprus-Russia DTT by Decree 585 dated 8 August 2023. Articles 5–22, 24, 27, and 29 are suspended; only basic framework articles remain in force. The practical consequence: dividends, interest, and royalties paid by Russian entities to Cyprus residents are no longer entitled to reduced withholding rates under the treaty. Full domestic Russian withholding applies, typically 15 % on dividends.
The Cyprus–Ukraine DTT remains fully active as of 2026. Cyprus continues to be used as a routing jurisdiction for Ukrainian-originating income flows.
CFC rules
Cyprus introduced Controlled Foreign Company rules in 2019 as part of the EU Anti-Tax Avoidance Directive (ATAD) implementation. A Cypriot parent may be attributed undistributed income from a foreign subsidiary if: the Cypriot entity holds more than 50 % of the subsidiary, the subsidiary is subject to an effective tax rate below half the Cypriot corporate rate (12.5 %, so the threshold is 6.25 %), and the subsidiary’s income is predominantly passive or from non-genuine arrangements. The CFC rules are targeted and do not affect straightforward operating subsidiaries.
No exit tax, no wealth tax
Cyprus does not impose an exit tax on individuals leaving the jurisdiction. Unrealised gains on assets held at the time of departure are not crystallised for tax purposes. There is no wealth tax, inheritance tax, or gift tax. Estate planning through Cyprus is correspondingly clean.
Frequently asked
How does Non-Dom status work in Cyprus?
Non-Dom is an automatic status for Cyprus tax residents whose domicile of origin is outside Cyprus and who have not been Cyprus-domiciled for more than 17 out of the last 20 years. It exempts qualifying individuals from the Special Defence Contribution (17 %) on dividends and interest income. The only cost remaining on such passive income is the GESY health contribution: 2.7 % per year, capped at € 4,770 annually for dividend and interest sources.
What are the requirements for the 60-day residency rule?
You must satisfy all five conditions simultaneously in the calendar year: (1) physically present in Cyprus for at least 60 days; (2) not a tax resident of any other country; (3) not present in a single other country for 183 or more days; (4) a Cyprus address (owned or rented) available to you; and (5) an economic nexus in Cyprus, such as running a Cypriot company, being employed by one, or holding a directorship.
Is cryptocurrency taxed in Cyprus?
It depends on classification. Active crypto trading gains are taxed at a flat 8 % under Article 20E of the Income Tax Law, which came into force on 1 January 2026. Passive investment gains, where you hold without systematic trading activity, remain at 0 %, in line with the general capital-gains exemption on securities. Gains realised before 2026 are not retroactively affected.
What happened to the Cyprus–Russia double-tax treaty?
Russia suspended the operative articles of the Cyprus-Russia DTT by Decree 585 on 8 August 2023. Articles 5–22, 24, 27, and 29 are no longer in force between the two countries. The consequence is that passive income flows from Russia to Cyprus residents (dividends, interest, royalties) are no longer entitled to reduced withholding rates under the treaty. Full domestic Russian rates apply. The Cyprus–Ukraine DTT is unaffected and remains active.
Can I be taxed in two countries as a Cyprus tax resident?
Dual taxation is generally avoided through Cyprus’s network of approximately 65 DTTs, which include tie-breaker clauses for residence conflicts. Where no treaty exists, Cyprus grants unilateral relief for foreign taxes paid on income also taxed in Cyprus. The 60-day residency route also requires that no other country claims you as tax resident for the year, which structurally prevents dual-residency conflicts if conditions are met.
What is the capital gains tax rate in Cyprus?
Gains on shares, securities, bonds, and financial instruments: 0 %, including foreign assets. Gains on Cyprus immovable property: 20 %, with a lifetime exemption of €85,430 on a primary residence sale. Foreign immovable property: 0 % in Cyprus (source-country tax may apply). Passive crypto holdings: 0 %. Active crypto trading from 2026: 8 % flat.
Verified · 2026-05-28