Tax Department guidance on the 60-day tax residence provisions for individuals

The Cyprus Tax Department has issued a circular setting out guidance on the new tax residence provisions for individuals introduced by Law No.119(I)/2017. With effect from 1 January 2017 individuals who meet all the following conditions in respect of a given tax year will be deemed to be tax-resident in Cyprus:

  • They are physically present in Cyprus for one or more periods amounting to at least 60 days.
  • They do not remain in another country for one or more periods exceeding 183 days in total.
  • They are not tax resident in another country.
  • They undertake business in Cyprus, have employment in Cyprus or hold a post in a Cyprus-resident company which continues to the end of the tax year
  • They maintain a permanent residence at their disposal for their use in Cyprus.

Individuals who satisfy the criteria may obtain a tax residence certificate by completing the prescribed form (T.126 (2017) and submitting it to the Tax Department together with evidence of arrival and departure in Cyprus, property title deeds or lease contract and evidence of employment.

Provided that all other conditions are satisfied the tax residence certificate can be issued before the 60 days stay has been completed if the application for the issue of the certificate relates to dividends or interest to be received from overseas. In this case the applicant must provide evidence of the imminent receipt of the income and details of the tax authority or organisation to which the tax residence certificate will be submitted.

The circular notes that anyone who is both tax resident in Cyprus according to the 60-day rule and also domiciled in Cyprus will be required to pay SDC tax.