NON Domicile
A non-domiciled individual in Cyprus is an individual who is not considered a tax resident of Cyprus, but who is present in the country for more than 183 days in a calendar year. Non-domiciled individuals in Cyprus may be subject to different tax rules and exemptions than Cyprus tax residents.
Taxation of income
Non-domiciled individuals in Cyprus may be subject to taxation on their worldwide income, but only on the portion of the income that is received in Cyprus. Income received outside of Cyprus is not subject to taxation.
Tax exemptions
Non-domiciled individuals in Cyprus may be eligible for certain tax exemptions, such as the exemptions available to Cyprus tax residents.
Special Contribution for Defense (SCD)
Non-domiciled individuals in Cyprus are subject to a Special Contribution for Defense (SCD) on their income earned in Cyprus. The rate is currently set at 17% for the year 2022.
Residency test
To determine whether an individual is considered a non-domiciled individual in Cyprus, a residency test is applied. This test looks at the number of days an individual has spent in Cyprus in a given tax year. If an individual is present in Cyprus for more than 183 days in a calendar year, they will be considered a Cyprus tax resident.
Double Taxation Agreement
Cyprus has signed double taxation agreements with several countries to avoid double taxation of income earned by non-residents of those countries. Non-domiciled individuals in Cyprus who earn income from these countries may be eligible for certain tax exemptions under these agreements
Rules and exemptions are subject to change
It is important to note that these rules and exemptions are subject to change and individuals should seek legal and financial advice to determine their eligibility and to ensure compliance with all relevant tax laws and regulations.
Frequently Asked Questions
What does Non-Domicile status mean in Cyprus?
Non-Domicile status in Cyprus refers to individuals who meet the Cyprus tax residency criteria based on physical presence, while benefiting from specific tax exemptions provided under Cyprus tax legislation. The rules applicable to non-domiciled individuals differ from those applicable to domiciled taxpayers.
How is tax residency determined for Non-Domicile purposes?
Tax residency in Cyprus is primarily determined by the 183-day residency test. An individual who is present in Cyprus for more than 183 days within a calendar year may be considered a Cyprus tax resident for that year, subject to applicable rules.
How is income taxed for Non-Domiciled individuals in Cyprus?
Non-domiciled individuals may be subject to taxation on income received in Cyprus, while income earned and received outside Cyprus may not be subject to Cyprus taxation, depending on the nature and source of the income and applicable regulations.
Are Non-Domiciled individuals entitled to tax exemptions?
Yes. Non-domiciled individuals may benefit from specific tax exemptions available under Cyprus tax law, which can differ from those applicable to domiciled taxpayers, subject to meeting statutory conditions.
Is Special Contribution for Defence (SCD) applicable to Non-Domiciled individuals?
Non-domiciled individuals may be subject to Special Contribution for Defence (SCD) on certain types of income earned in Cyprus, based on the rates applicable for the relevant tax year and the nature of the income.
Do Double Taxation Agreements affect Non-Domicile taxation?
Yes. Cyprus has an extensive network of Double Taxation Agreements, which may provide relief or exemptions for income earned abroad, helping to avoid double taxation for eligible individuals.
Does Non-Domicile status apply automatically?
No. Non-Domicile status depends on individual circumstances, including residency status, duration of stay, and personal tax profile. Each case should be assessed individually to determine eligibility and applicable tax treatment.
Can Non-Domicile tax rules change over time?
Yes. Tax laws and exemptions are subject to change, and individuals should seek professional legal and tax advice to ensure ongoing compliance with current regulations.
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