The Cyprus Parliament has unanimously approved an amendment to the Income Tax Law which now allows an individual to be considered a tax resident in Cyprus provided that the individual does not stay in any other state for one or more periods which exceed 183 days in the tax year, the individual is not tax resident in any other state for the same tax year and the following conditions are met:
(i) the individual must remain in Cyprus for a period of at least 60 days during the tax year;
(ii) the individual must maintain a permanent residence in Cyprus. This can either be rented or bought.
(iii) the individual should pursue any business/employment in Cyprus or be a company director in a company which is already tax resident in Cyprus during the tax year.
It is noted that even if the above conditions are met, the individual is not considered a tax resident of Cyprus in the tax year if the business/employment/directorship ceases.
The above gives the non tax resident individual the opportunity to transfer tax residency to Cyprus and be taxed only on income from the activities exercised in Cyprus.
In calculating the days the following apply:
(i) the day of departure from Cyprus is considered a day outside Cyprus;
(ii) the day of arrival in Cyprus is considered a day in Cyprus;
(iii) arrival in Cyprus and departure from Cyprus within the same day is counted as one day in Cyprus;
(iv) departure from Cyprus and return to Cyprus within the same day is counted as one day outside Cyprus.
The content of this circular is for information purposes only and is not tax or legal advice. Our team of specialists are ready to assist you in detail on all regulatory matters.