Cyprus has offered a 60-day route to tax residency since 2017, and for most of that period it came with a condition that quietly excluded a large share of the people it was meant to attract. An applicant had to show, among other things, that they were not tax resident in any other state. For internationally mobile business owners – who frequently remain on another country’s register long after they have moved their life and their work – that single sentence was often the end of the conversation.
The tax reform package approved by the House of Representatives on 22 December 2025, published in the Official Gazette on 31 December 2025 and effective from 1 January 2026, removed it. The 60-day rule survives intact in every other respect; what has changed is that being tax resident elsewhere is no longer, by itself, a disqualification.
What the 60-day rule asked for, and what it asks for now
The rule applies to an individual who does not meet the ordinary 183-day test. The 183-day rule is unchanged: spend more than 183 days in Cyprus in a calendar year and you are tax resident, with nothing further to prove. The 60-day rule is the alternative for people whose year is genuinely split across several countries.
| Condition | Up to 31 December 2025 | From 1 January 2026 |
| At least 60 days of physical presence in Cyprus in the tax year | Required | Required – unchanged |
| Not present in any other single state for more than 183 days in the tax year | Required | Required – unchanged |
| Carrying on business in Cyprus, employed in Cyprus, or holding office in a Cyprus tax resident company at any time in the tax year | Required | Required – unchanged |
| A permanent residence in Cyprus, owned or rented | Required | Required – unchanged |
| Not tax resident in any other state in the same tax year | Required | Removed |
Note what has not moved. The 183-day ceiling on presence in any one other country is a separate condition and it still applies. A person who spends 200 days a year in a single foreign country cannot use the 60-day rule, whatever their residency status there. The business, employment or directorship link must also be live during the tax year: if it is terminated, the residency claim falls with it for that year.
The treaty now decides the outcome, not the statute
Removing the condition does not mean two countries can both tax the same person without consequence. It means the conflict is resolved where it was always supposed to be resolved – in the applicable double tax treaty. Cyprus has an extensive double tax treaty network, and most of those treaties follow the OECD Model tie-breaker in Article 4(2). That test runs in a fixed order: the state where a permanent home is available; then the state of closer personal and economic relations, the centre of vital interests; then habitual abode; then nationality; and, failing all of those, agreement between the two tax authorities.
This is the practical consequence of the 2026 change, and it is easy to underestimate. Before, a competing residence was a yes-or-no question answered by Cypriot law. Now it is an evidential question answered by a treaty, and the evidence is the ordinary material of a life: where the family home is, where the children are at school, where the bank and investment accounts are held, where the board meets, where the person actually sleeps. A Cyprus tax residency certificate obtained on the 60-day rule is a strong document, but it is not immune to a foreign authority applying the tie-breaker and reaching the opposite conclusion.
Where no treaty exists with the competing state, there is no tie-breaker at all, and genuine double residence is possible. That is a scenario to plan around before the tax year closes, not after.
What Cyprus tax residency is worth in 2026
The same reform reshaped the personal income tax scale. The tax-free threshold rose from €19,500 to €22,000, and the bands above it were widened.
| Bands to 31 December 2025 (€) | Rate | Bands from 1 January 2026 (€) | Rate |
| 0 – 19,500 | 0% | 0 – 22,000 | 0% |
| 19,501 – 28,000 | 20% | 22,001 – 32,000 | 20% |
| 28,001 – 36,300 | 25% | 32,001 – 42,000 | 25% |
| 36,301 – 60,000 | 30% | 42,001 – 72,000 | 30% |
| 60,001 and above | 35% | 72,001 and above | 35% |
Source: Cyprus Income Tax Law bands in force to 31 December 2025 and as amended with effect from 1 January 2026 by the enacted 2026 tax reform package.
For most internationally mobile clients, however, the income tax scale is not the main attraction. Non-domiciled status is. An individual who is Cyprus tax resident but not Cyprus domiciled remains outside Special Defence Contribution altogether, which means dividend and interest income escape SDC for as long as non-dom status holds – ordinarily until the individual has been Cyprus tax resident for at least 17 out of the preceding 20 years. Where SDC does apply, the rate on actual dividend distributions fell from 17% to 5% for profits of tax years from 2026 onwards.
Relocating employees and executives should also look at the 50% exemption under section 8(23A) of the Income Tax Law: half of employment income is exempt for up to 17 tax years where annual remuneration exceeds €55,000, first employment in Cyprus began on or after 1 January 2022, and the individual was not Cyprus tax resident for at least 15 consecutive tax years beforehand. The 2026 reform left that relief untouched.
Contributions are the offsetting cost. Employees contribute 8.8% to Social Insurance on insurable earnings capped at €68,904 for 2026, and 2.65% to the General Healthcare System on total income capped at €180,000.
A new obligation that arrives with the status
The reform also amended the Assessment and Collection of Taxes Law so that Cyprus tax resident individuals over the age of 25 must file an income tax return. Anyone claiming residency under the 60-day rule should assume filing is mandatory rather than optional, and should treat the return as part of the evidence supporting the claim.
Three practical points follow. Keep contemporaneous proof of the 60 days – boarding passes, entry records and utility usage, not a reconstruction in March. Make sure the permanent home is a real one, taken for the whole tax year rather than a short let arranged near the deadline. And make sure the Cyprus business, employment or directorship is genuine and documented, because that is the condition a foreign authority will probe first.
Who this change actually helps
The clearest beneficiaries are people mid-move: founders who have relocated to Cyprus but remain on a former home country’s register for part of the year, executives serving out a notice period abroad, and Gulf-based entrepreneurs holding a residency certificate in one jurisdiction while building substance in another. It also helps anyone whose previous country of residence applies a long deemed-residence tail, which used to make the old condition impossible to satisfy in the very year the move happened.
What has changed is the entry point, not the standard of proof. Cyprus has made it easier to start; the treaty still decides where you finish. Anyone planning a 2026 claim should fix the position now, while there are still months left in the tax year to build the presence, the home and the corporate link that the rule requires.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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