CYPRUS Law and Practice Contributed by: Alexis Erotocritou, Dafni Loizou and Georgia Demou, A.G. Erotocritou LLC
As a result, qualifying individuals can receive divi - dends and certain investment income (eg, interest and gains on sale of listed shares) free from Cyprus taxation, making Cyprus a highly efficient jurisdiction for international wealth structuring and investment holding activities. Additionally, individuals may also be benefited from the special tax regimes that are available for pensioners, employees and traders in crypto-assets. The Cyprus Non-Dom framework is fully aligned with international transparency and compliance standards while continuing to provide substantial benefits to for - eign individuals relocating to Cyprus. Any tax planning must be genuine, documented and commercially or family-planning driven, rather than artificial or purely tax-motivated. 1.4 Pre-Immigration and Exit Planning For individuals moving to Cyprus, the key pre-immigra - tion planning is to decipher whether they will become a Cyprus tax resident under the 183-day rule or the 60-day rule, or whether they can qualify as non-dom for SDC purposes. Cyprus tax residents are generally taxed on worldwide income, but non-dom individuals remain exempt from SDC on dividends and interest, while non-residents are taxed only on Cyprus-source income. On exit, Cyprus does not generally impose a person - al exit tax on individuals merely because they cease their Cyprus tax residence. The main planning point is to ensure the individual ceases to be a Cyprus tax residence under the day-count rules and to identify any continuing Cyprus-source income, Cyprus real estate, Cyprus companies or trusts with Cyprus-res - ident beneficiaries. Cyprus exit tax rules are mainly applicable to corporate taxpayers moving assets or tax residence outside the Cyprus tax net, not ordinary individual departure planning. 1.5 Taxation of Real Estate Owned by Non- Residents and Non-Citizens In Cyprus, real estate owned by non-residents and non-citizens is taxed as follows.
• CGT: non-residents pay CGT only on gains from Cyprus-based immovable property or related shares as further explained in 1.1 Tax Regimes . Where a company derives its value primarily from immovable property situated in Cyprus, CGT may be triggered, even if the transfer is executed through offshore share transactions. • Income Tax and GHS Contributions: non-residents in Cyprus are taxed on rental income from Cyprus property through income tax and GHS Contri - butions (subject to ceiling amount of income of EUR180,000, per individual, per year). Rental income may also be subject to VAT in certain com - mercial leasing cases. 1.6 Stability of Tax Laws Cyprus has a very stable tax system, which was large - ly the same for the last 15 years, until a recent tax reform which took effect on 1 January 2026. There are no other current plans or proposals to change the tax regime in Cyprus. 1.7 Transparency and Increased Global Reporting Cyprus is fully compliant with the EU directives relat - ing to tax and exchange of information matters and has addressed possible abuse or loopholes in tax laws in the following ways. • Anti-abuse actions: GAAR (Income Tax Law for artificial arrangements)/transfer pricing rules (needs documentation)/substance requirements (for com - panies and holding structures). Anti-abuse actions preserve the stability of the private-client regime. • CRS (Common Reporting Standard): Cyprus applies CRS, requiring automatic reporting of offshore accounts and trusts, ensuring full financial transparency. • FATCA: (a) All main banks collect tax residency and TIN details from all clients. (b) Account data is reported annually to tax au - thorities for international exchange. (c) Offshore accounts, companies, and trusts are fully transparent. (d) Incorrect or missing info may trigger compli - ance checks.
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