Income Tax for Individuals
The income on which an individual will be taxed in Cyprus, is according to whether an individual is classified as a tax resident in the Republic of Cyprus or not.
A Cyprus tax resident is taxed on all of their chargeable income arising from all sources inside and outside of the Republic. While a non-Cyprus tax resident is taxed only on the income arising from inside the Republic.
Cyprus Tax Residency and how it is determined:
Below are two guideline rules that can be used, in order to distinguish and understand when an individual qualifies as a Cyprus tax resident for a specific year:
The 183 days rule:
If an individual resides in Cyprus for more than 183 days during a tax year, then this individual can qualify as a Cyprus tax resident for that tax year;
The 60 days rule:
On 1st January 2017 the above rule was amended, in order for individuals who meet the below conditions to also be considered as a Cyprus Tax Resident, unde the '60 day rule'. Conditions to qualify as a tax resident for a specific year:
- An individual does not spend more than 183 days, either continuously or in total, of that tax year in another country and is not a tax resident in another country for that year;
- An individual spends at least 60 days in Cyprus during that year;
- An individual carries out a business and/or is working in Cyprus, and/or holds an office with a Cyprus tax resident company any time during that year;
- The individual either owns or rents a permanent residence in Cyprus.
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.