Cypriot tax authorities issue guidelines on 60-day tax residence rule for individuals

The Tax Department of Cyprus has issued guidance on the new 60-day rule on tax residence provisions for individuals, which came into effect after the adoption of Law No.119(I)/2017. With effect from 1 January 2017, an individual who meets all the conditions listed below with respect to a given tax year will be deemed tax-resident in Cyprus:

  • He/she is physically present in the country for one or more periods that total at least 60 days;
  • He/she does not stay in another country for one or more periods, that exceed a total of 183 days;
  • He/she is not a tax resident of another state;
  • He/she conducts business in Cyprus, is employed in Cyprus or occupies a director’s post in a Cyprus-resident company which continues to trade till the end of the tax year;
  • He/she maintains a permanent residence at his/her disposal for use in Cyprus.

A person who satisfies these criteria can receive a tax residence certificate by completing form T.126 (2017) and handing it to the Tax Department. Of course, an applicant for tax residency will have to also provide evidence of arrivals to and departures from Cyprus, property title deeds or lease contract and evidence of employment or occupation of a director’s position in a Cyprus tax resident company.

As long as all the other conditions are satisfied, the Tax Department can issue the tax residence certificate before the 60 days stay period is over if the application relates to overseas-derived dividends or interests. For this, the applicant provides evidence of the imminent receipt of income and details of the tax authority / or the organisation to which such a certificate will be submitted.

For more information about the 60-day rule please refer to our insight “Obtain Cyprus Tax Residency by Staying in Cyprus 60 days per Year” published on 20th July 2017.

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