In 2017 Cyprus presented new regulation suggesting the opportunity of “zero tax circumstances” for non-domicile residents, who reside in Cyprus only for 60 days annually.
Government Authorities of Cyprus made an adjustment to the clarification of “Cyprus Tax Resident Individual”, as indicated in the Income Tax Law 118 (I)/2002. The amendment became applicable on the 1st of January 2017. This adjustment allows the individual to be deliberated as a Cyprus tax resident under the 60 days program, under adherence to relevant conditions.
On 01 February 2022, the Ministry of Finance provided a new notice regarding the 60 days tax resident program. This document was issued to simplify regulations of obtaining residency under the 60-day program and accelerate the process of issuing the certificate.
Criteria:
- An individual does not stay more than 183 days, either on a consistent base 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 stays no less than 60 days in Cyprus, either on a constant base or in total, during that year;
- The individual conducts a business and/or is working in Cyprus, and/or keep an office with a Cyprus tax resident company any time during that year;
- The individual either owns or rents a permanent residence in Cyprus;
Exceptions:
The circular consists of a few exceptions and explanations. One exception to the 60-day scheme conditions indicated above concerns the case when the applicant is from the United Kingdom. If the individual applying for the tax residency based on the 60-day tax rule for a relevant tax year and during the same period the individual was simultaneously a tax resident in the United Kingdom, then condition (B) indicated above is not applicable.
Aforesaid exception also refers to the cases where an individual is a tax resident in a country where the calendar tax year differs from Cyprus. For instance, in one state a tax calendar year might start in April 2022 and enclose in April 2023. In this matter, the individual applying for a Cyprus tax residency under the 60-day scheme is eligible to take condition (B) indicated above, providing they also obtain approval from the Registrar.
60 Day rule certificate – Fast track
For the giving of a Cyprus tax resident certificate for individuals that correspond to the conditions indicated above, a particular statement Form Τ.Φ.126 (2022) must be filled out and submitted in conjunction with all the other confirmatory documents to the Cyprus tax department. All these documents must be submitted in either the English or the Greek language and appropriately stamped according to the Cyprus stamp duty law. If the confirmative documents have another language than English or Greek, in this case, they should be officially translated into either one of the two pointed above languages.
Frequently Asked Questions
What is the Cyprus 60 Day Rule?
The Cyprus 60 Day Rule is a tax residency scheme introduced in 2017 that allows individuals to be considered Cyprus tax residents even if they spend only 60 days per year in Cyprus, provided specific legal conditions are met.
Who can qualify as a Cyprus tax resident under the 60 Day Rule?
An individual may qualify if they do not spend more than 183 days in another country, are not tax resident elsewhere, spend at least 60 days in Cyprus, maintain a permanent residence in Cyprus, and have business, employment, or an office connected to Cyprus during the relevant tax year.
Does the 60 Day Rule replace the standard 183-day tax residency test?
No. The 60 Day Rule is an alternative tax residency test. Individuals may qualify either under the traditional 183-day rule or under the 60-day rule, depending on their circumstances.
Is it required not to be tax resident in another country?
Yes, as a general rule. However, specific exceptions apply, including cases involving the United Kingdom or countries with different tax calendar years, subject to approval by the Cyprus Tax Department.
What are the main conditions that must be met under the 60 Day Rule?
To apply under the 60 Day Rule, an individual must spend at least 60 days in Cyprus during the tax year, maintain a permanent residence in the country, and have an active business, employment, or office connection with Cyprus, while also ensuring that the time spent and tax status in other countries remain within the limits prescribed by law.
What is the 60 Day Rule tax residency certificate?
The Cyprus tax residency certificate under the 60 Day Rule is an official document issued by the Cyprus Tax Department confirming an individual’s tax residency status for a specific tax year.
Is there a fast-track procedure for obtaining the 60 Day Rule certificate?
Yes. A fast-track procedure is available. Applicants must submit Form T.F.126, along with supporting documents such as proof of employment or office, justification for urgency, and evidence of expected income from abroad.
Can tax residency rules under the 60 Day Rule change?
Yes. Tax regulations and administrative practices may change, and eligibility should always be assessed based on current legislation. Professional tax advice is strongly recommended to ensure compliance.
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