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Tax residency in Cyprus in 2026 is established through actual presence, registration with the Tax Department, and confirmation of a connection to the jurisdiction. For individuals, this status determines where income is reported and which tax regimes apply. For companies, it relates to the place of management, control, and corporate taxation.
The rules are based on the Income Tax Law. A tax resident is a person who is recognized as having a connection to Cyprus for tax purposes. This is not an immigration status and is not a substitute for a residence permit: a person may hold a residence permit but still not meet the tax criteria.
Eligibility Requirements
For individuals, the 183-day rule applies. If a person stays in Cyprus for more than 183 days in a calendar year, they are considered a tax resident. Days are counted based on actual entry and exit dates: the day of arrival counts as a day in Cyprus, and the day of departure counts as a day outside the country.
There is also the 60-day rule. It applies to those who live in multiple countries but have an economic connection to Cyprus. According to the Tax Department, a person is considered a tax resident if they are present in Cyprus for at least 60 days, are not a tax resident of another country, do not spend more than 183 days in another country, have a permanent residence in Cyprus, and conduct business, work, or serve as a director of a Cypriot company.
Registration is handled through the Tax Department. The applicant needs a tax identification number, access to the TaxisNet system, and documents confirming days of stay, address, income, and the basis for their connection to Cyprus. Form T.D. 126 is used for the tax residency certificate, including the option based on the 60-day rule.
Advantages of Tax Residency
Cyprus attracts entrepreneurs, investors, retirees, and business owners with its combination of straightforward tax rules and the Non-Dom regime. Non-Dom means that a person is a tax resident of Cyprus but does not have a Cypriot domicile for the purposes of the Special Defense Contribution. Domicile is a stable legal connection to a country, typically through origin or the intention to live there permanently.
For individuals, the following factors are of practical importance:
- a progressive income tax with a tax-free allowance;
- exemption for Non-Doms from the Special Defense Contribution on dividends and interest;
- special rules for foreign pensions;
- no inheritance tax;
- tax planning for owners of foreign assets.
For businesses, the corporate tax rate is important. Effective January 1, 2026, the corporate income tax rate in Cyprus has been raised to 15%, in line with the international reform on minimum taxation and the OECD Pillar Two rules. At the same time, Cyprus maintains a straightforward system for companies with actual management, an office, directors, and an economic presence.
Advantages of Tax Residency
Cyprus attracts entrepreneurs, investors, retirees, and business owners with its combination of straightforward tax rules and the Non-Dom regime. Non-Dom means that a person is a tax resident of Cyprus but does not have a Cypriot domicile for the purposes of the Special Defense Contribution. Domicile is a stable legal connection to a country, typically through origin or the intention to live there permanently.
For individuals, the following factors are of practical importance:
- a progressive income tax with a tax-free allowance;
- exemption for Non-Doms from the Special Defense Contribution on dividends and interest;
- special rules for foreign pensions;
- no inheritance tax;
- tax planning for owners of foreign assets.
For businesses, the corporate tax rate is important. Effective January 1, 2026, the corporate income tax rate in Cyprus has been raised to 15%, in line with the international reform on minimum taxation and the OECD Pillar Two rules. At the same time, Cyprus maintains a straightforward system for companies with actual management, an office, directors, and an economic presence.
Elina Almanova
Advocate
