As per Cyprus Tax legislation, an individual is considered to be a tax resident in Cyprus if they spend more than 183 days in Cyprus during a tax year.
The above Law has further amended in 2017 and in accordance with the amended legislation an individual can be considered tax resident in Cyprus as per the 60-day rule. This legislation is effective since 1.1.2017 and is applicable if all the following conditions are met:
- The individual resides in Cyprus for at least 60 days.
- The individual is not a tax resident in another country for the same tax year.
- The individual does not spend more than 183 days in any other country.
- Maintains a permanent residence in Cyprus, either owned or rented.
- Carry out business and/or be employed and/or hold an office in the Republic of Cyprus at any time during the year of assessment.
For the purposes of both the '183-day rule' and the '60-day rule', days in and out of Cyprus are calculated as follows:
- The day of departure from Cyprus counts as a day of residence outside Cyprus.
- The day of arrival in Cyprus counts as a day of residence in Cyprus.
- Arrival and departure from Cyprus in the same day counts as one day of residence in Cyprus, and
- Departure and arrival in Cyprus in the same day counts as one day of residence outside Cyprus.
Cy tax residents are eligible to various benefits such as mentioned below.
50% tax exemption for employees whose first employment in Cyprus begun from 1 January 2022 onwards, with an annual salary that exceeds €55,000 p.a. The exemption applies for 17 years.
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.