According to the legislation, an individual who spends more than 183 days in Cyprus is considered as Cyprus tax resident.
The amendment of the Income Tax Law extents the definition of “Cyprus tax resident” for individuals. The amendment applies retrospectively as from 1 January 2017.
With the amendment to the legislation and the introduction of a new “60-day” rule, an individual who does satisfy all of the following conditions may still be deemed to be Cyprus tax resident if he/she:
- i. does not spend more than a total of 183 days in any other country within a tax year
- ii. is not a tax resident of another country within the same tax year
- iii. remains in Cyprus for at least 60 days in the tax year
- iv. carries on a business in Cyprus or be employed in Cyprus or holds an office in a Cyprus tax resident person at any time during the tax year
- v. maintains a permanent home in Cyprus that is either owned or rented.
It should be noted that, if the employment/business or holding of an office is terminated, the individual will cease to be considered a Cyprus tax resident for that tax year under the new rules.
In order for an individual to obtain a tax residency certificate based on the 60 days rule, he/she must submit form T.D.126(2017) together with the following documentation:
- Copies of passports with stamps of entry and exit from Cyprus, boarding passes, electronic tickets etc
- Lease agreement or title deed of the taxpayer’s Cyprus residence
- Employment contract to be valid within the relevant tax year
PEK LTD August 2017
This newsletter has been prepared as a general guide and for information purposes only. It is not a substitution for professional advice. One must not rely on it without receiving independent advice based on the particular facts of his/her own case. No responsibility can be accepted by our firm or our staff for any loss caused by acting or refraining from acting on the basis of this newsletter.