Cyprus tax residency



Cyprus tax residency

The case
Until now an individual was considered to be a tax resident of Cyprus if the individual was present in Cyprus for at least 183 days in a year i.e. for more days than in any other jurisdiction.

In an effort to provide incentives to foreigners to come to work in Cyprus, the Cyprus House of Representatives voted into law an amendment to the above.
The amendment
The law has been amended so that an individual, who does not remain in any other country for one or more periods which altogether exceed 183 days in the same tax year and who is not a tax resident in any other state for the same tax year, be considered as a tax resident of Cyprus.

According to the new conditions an individual is considered a Cyprus Tax Resident if the following three criteria specifications are met:
- The individual stays in the Republic for at least 60 days in the tax year.
- Exercises any business in the Republic and/or is employed in the Republic and/or holds an office with a Cyprus tax resident person at any time during the tax year.
- Maintains (by owning or leasing) a permanent home in the Republic.
 
Note
Further amendments have been made to clarify that an individual that meets all the above conditions shall not be treated as a Cyprus tax resident in the tax year, if during that year the exercise of any kind of business in the Republic and/or employment in the Republic and/or holding of an office with a tax resident person in the Republic is terminated.
 
Calculation of the days of presence in Cyprus
For calculating the days of presence in Cyprus:
- The day of arrival to Cyprus is considered as a day in Cyprus.
- The day of departure from Cyprus is considered as a day outside of Cyprus.
- The arrival in Cyprus and the departure from Cyprus on the same day is considered as one day in Cyprus.
- The departure from Cyprus and the return to Cyprus on the same day is considered as a day out of Cyprus.