Registration of tax residency in Cyprus: important aspects
The taxation system of the Republic of Cyprus is one of the most favorable in the Eurozone. Having gone through the procedure of registration of tax residency, you get a clear and transparent mechanism with numerous benefits. Moreover, the bonuses apply not only to legal entities, but also to ordinary residents. Specialists of our law firm will help you to deal with this task.
What are the requirements under Cypriot tax law?
Future tax resident:
– Must not have a similar status in the territory of other countries.
– Must not reside in the territory of another country for more than 183 days per year (either continuously or cumulatively).
– Must own his/her own business or be officially employed in Cyprus (this requirement also applies to directors/managers of companies with tax residency registration on the island).
– Must own or rent his/her own home in the Republic.
As of 2017, a more simplified scheme – the so-called “60 Day Rule” – has been approved.
Applicant:
– Resides in Cyprus for 60 days or more (at least).
– Is employed or operates a company with local registration.
– Pays social security contributions.
– Holds a personal or corporate bank account with one of the country’s banks.
– Rents or owns his/her own home.
– Is not a tax resident of another country.
He or she must not stay abroad for more than 183 days per year (either continuously or cumulatively).
Pros in Cyprus tax law
Due to its structured and understandable nature, the country’s tax system provides simple tools for tax optimization:
1. Minimized risk of double tax withdrawal (relevant agreement with more than 60 countries of the world).
2. The amount of social contributions and income tax is the smallest in the EU.
3. The flat corporate tax rate is also one of the lowest in Europe.
4. Zero charge on dividends.
5. Zero charge on the sale of shares, bills of exchange and other securities.
6. Zero accruals for wealth.
7. Zero charge on inheritance received.
In addition, we should mention the attractive intellectual property regime (IP Box). 80% of income from such assets is not subject to taxation.
Domicile is another option
Determined by place of:
– Birth;
– residence;
– registration of the business project;
– custody of finances.
That is, a person must be born in Cyprus or have lived here for 17 years or longer (the last 2 decades are taken into account).
Registration of tax residency: filing a petition
If a person meets any of the criteria, he/she has the right to apply directly for the desired status. The application is sent to the tax authority of the country. The application is accompanied by a package of documents, which, in addition to the application itself, includes:
– Certificates confirming that you have certain or other connections on the territory of the Republic – family, employment, registered business, real estate.
– Receipt of payment of the state duty.
– Copies of passport with appropriate marks, ticket receipts and other documents that will confirm that in the current year you stay in the territory of the state for 183 days or longer than 2 months.
– Certificates that you are not in tax relations on the territories of other countries.
We will help you to properly prepare the whole package of required documents so that the registration of your tax residency is completed efficiently.
If there are no violations of Cypriot tax laws during the registration process, you will receive a positive response in the form of a state certificate. The standard processing time for such an application is approximately 12 months.
As a conclusion
Obtaining tax residency in Cyprus opens up wide and favorable prospects. If you need qualified legal assistance in resolving this issue, please contact us!
