On 01 February 2022 the Ministry of Finance issued a new circular regarding the 60 day tax resident rule. The circular was issued to ease rules in regards to obtaining residency under the 60 day rule and speed up the process of issue of certificate.
According to the Cyprus tax law, an individual is considered a Cyprus tax resident under the 60 day tax rule if the below conditions are met:
- An individual does not spend more than 183 days, either continuously or in total, of that tax year in another country;
- The individual is not a tax resident in another country for that year;
- An individual spends at least 60 days in Cyprus, either continuously or in total, during that year;
- The 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 circular listed a few exemptions and clarifications. One exemption to the 60 day rule conditions listed above, is in the case that the applicant is from the United Kingdom. If the individual claiming the tax residency based on the 60 day tax rule for a specific tax year and during the same period the individual was also a tax resident in the United Kingdom, then condition (B) listed above is not applicable.
The above exemption also applies in the cases where an individual is a tax resident in a country that follows a different calendar tax year than Cyprus. For example, in one state a tax calendar year might commence in April 2022 and conclude in April 2023. In this event, the individual applying for a Cyprus tax residency under the 60 day rule might also be permitted to oversight condition (B) listed above, assuming they also receive approval from the Registrar.
60 Day rule certificate – Fast track
For the issuance of a Cyprus tax resident certificate for individuals that meet the conditions listed above, a special statement Form Τ.Φ.126 (2022) must be completed and submitted along with all the other supporting documents to the Cyprus tax department. All supporting documents must be submitted in either the English or the Greek language and appropriately stamped under the Cyprus stamp duty law. If the supporting documents are in a language other than English or Greek then an official translation must be done to either one of the two mentioned languages.
The process for obtaining the 60 day tax resident certificate has been simplified and can now be issued upfront and in advance before the 60 days pass. In order for the certificate to be issued under the fast track process, the below listed evidence must be provided:
- Evidence of an employment appointment/holding an office;
- Justifications on the need of the fast track procedure;
- A receipt of an upcoming income from a source that is outside of the Republic of Cyprus and therefore justifies the urgent need to present the Cyprus tax resident certificate to the tax administrators abroad
Individuals that qualify for the 60 day rule tax resident scheme and are also domicile in Cyprus are required to pay Special Defence Contribution on the below listed rates:
- Dividend income: 17%
- Interest income: 30%
- Rental income: 3%
For more details in regards to the 60 day rule tax residency scheme and the new circular please contact our offices at firstname.lastname@example.org.
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.