Cyprus has become a popular jurisdiction for changing tax residency due to its attractive tax rates and tax treatment.

According to the Cyprus Tax Code, an individual can be recognized as a tax resident of Cyprus under two criteria:

1. Residing in the country for at least 183 days per year is the standard criterion for most countries.
2. “60-Day Rule” – Since 2017, Cyprus has introduced a flexible rule that allows individuals to become tax residents if they spend at least 60 days per year in the country, provided they fulfill the following requirements:
   • The individual is not tax resident in another country.
   • The person has an economic activity or permanent residential property in Cyprus.
   • The person does not spend more than 183 days in any other country during the year.

Advantages of tax residency in Cyprus

Cyprus offers a number of advantages for individuals who become its tax residents. Firstly, it has a taxation system based on low rates on corporate taxes and dividends.

The peculiarities of taxation in Cyprus are as follows:

Personal income tax: The tax rate on income is 17%. However, tax residents of Cyprus can take advantage of exemptions and exemptions on dividends, interest and gains from the sale of real estate.

• No inheritance tax: Cyprus does not levy inheritance tax, making it attractive to individuals wishing to pass on their property by inheritance.
• Tax incentives for new residents: There are a number of tax incentives available as part of a program to attract foreign investors, including a reduced tax rate on income from dividends received from foreign companies.

Termination of tax residency in other countries

In order to change your tax residency, you must not only meet the Cyprus requirements, but also document the termination of your tax residency status in another country.

1. United Kingdom

In the UK the system of tax residency is regulated by the Income Tax Act. The UK uses several criteria to determine tax residency, including the number of days of residence, as well as more complex tests such as connection to home, family and work responsibilities.

2. Germany

In Germany, tax residency is regulated by the German Tax Code (Abgabenordnung). In order to cease to be a tax resident in Germany, it is necessary to provide proof of leaving the country, including documents confirming that the person no longer has a permanent residence, as well as certificates of absence from the country for a year.

Changing tax residency is a complex process that requires careful attention to compliance with the rules and legal requirements both in the country where tax residency is terminated and in the country where it is acquired.