Tax residence in Southern Cyprus (60-day rule)

📘 Basic Information
Cyprus offers one of the most flexible tax residency schemes in the EU.
Under a 2017 amendment to the law, an individual may become a tax resident of the Republic of Cyprus after only 60 days of presence per year, provided that certain conditions are met.

This regime is particularly popular among entrepreneurs, investors, and digital nomads seeking low taxation, stability, and the benefits of EU membership.

⚖️ Conditions of the 60-Day Rule
To qualify as a tax resident of Cyprus, an individual must meet all of the following conditions:

• Be physically present in Cyprus for at least 60 days during the calendar year.
• Not be a tax resident of any other country during that year.
• Not carry out employment or business activities in another country (except for short-term travel).
• Carry out business or employment in Cyprus, or act as a director of a Cypriot company.
• Maintain a permanent residence (house, apartment, or rented property) in Cyprus for the entire period.

If these conditions are met, the individual is considered a tax resident of Cyprus even if they reside there for only two months per year.

📅 Alternative – the 183-Day Rule
In addition to the 60-day scheme, the traditional 183-day rule also applies, under which tax residency is established after a six-month stay.
Accordingly, if a person spends more than 183 days in Cyprus, they automatically become a tax resident without any additional conditions.

💰 Tax Benefits for Residents
Cyprus is widely regarded as one of the most tax-friendly countries in the EU.

Key advantages include:

• 💼 No tax on dividends, interest, or capital gains (except gains from the sale of real estate located in Cyprus).
• 🧾 Low personal income tax rates:
  • 0% on income up to €19,500 per year
  • 20–35% on income exceeding this threshold
• 🏦 No wealth, inheritance, or gift taxes
• 🌍 Access to an extensive network of double taxation treaties (with more than 65 countries)

🏠 Practical Example
If an individual owns a company or investments outside Cyprus,
spends at least 60 days per year in Cyprus, and registers a permanent residence and address there, they may benefit from Cypriot tax residency.

In such cases, the individual is taxed under Cypriot law rather than the laws of their country of origin,
which often results in substantial tax savings.

📄 How to Obtain Tax Residency

• Obtain permanent or temporary residence (e.g. a “Yellow Slip” or “Permanent Residency”).
• Open a bank account and establish an address in Cyprus (owned or rented property).
• Provide evidence of a minimum annual stay of 60 days, such as flight tickets or accommodation records.
• Apply to the tax authorities for a Tax Residency Certificate, confirming tax residency status.