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Newsletter on new 60 days Tax Residency Certificate

25 February 2022

Cyprus 60 days tax residency scheme: relaxing rules for more comfort

A new Circular has been issued by Cyprus tax authorities to relax the rules of obtaining a tax residence certificate, upon completion of 60 days of residence in Cyprus (consecutive or not) within a tax year.

What is a tax residence certificate for?

The tax residency certificate allows individuals to locate tax-wise in Cyprus, and benefit the Cyprus tax incentives, with tax holidays and permanent exemptions for Cyprus non-domiciled residents.

The scheme offers individuals the option to decline their tax residency in the country where they reside just before and shift to Cyprus tax residency, gaining a waiver for any tax liabilities abroad under conditions.

Fast-track procedures for the 60 days certificate

No need to complete the 60 days in Cyprus for obtaining the 60 days certificate, it is granted upfront and in advance. However, evidence is to be provided of:

  • a business activity run in Cyprus, or of an employment appointment
  • a lease contract of permanent residence
  • an upcoming receipt of income from outside Cyprus, that justifies the urgent need for the certificate to show to the tax administration abroad
  • other reasons claimed that justify the fast-track procedure

Tax certificate all over the year for the UK, Australia, and some USA residents

As per rule, eligible for Cyprus, 60 days tax certificate are those individuals who have not resided in another state for more than 183 days within the calendar year.

Individuals who are tax residents in states with a different tax calendar can opt-in to the scheme at any time during the year. This shall be the case for tax residents of the UK, Australia, New Zealand, Bangladesh, Costa Rica, Egypt, Ethiopia, Kenya, Nepal, Pakistan, Thailand, and some USA states.

Tax holidays and more in Cyprus

The tax residency certificate offers tax holidays and permanent exemptions for the taxes to pay in Cyprus on worldwide income.

• Full tax exemption on capital gains: securities, shares, bonds, debentures, and options; on dividend and investment income (non-trading interest).

• Income exemptions & low tax rates:

  • Employment income from Cyprus: 50% exemption for remuneration beyond €100 000 for 10 years
  • Employment income from outside Cyprus: 100% exemption for income from employment that exceeds 90 days per year
  • Overseas pensions: exempted up to €3.420, taxed at 5% flat rate.

You can find the new Circular here in English and Greek.

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