Cyprus new 15% CIT + 5k non dom fee

[Don]

In Cyprus, there are some tax changes ahead:

• The corporate income tax rate would be increased from 12.5% to 15% for all corporations.
• A New annual fee of €5,000 for individuals who have received the non-dom status
• For normal Cyprus tax residents, the existing SDC on rental income would be abolished, and the SDC rate on dividends would be reduced from 17% to 5% for natural persons who are tax residents and domiciled in Cyprus. Anti-abuse rules will be introduced for disguised dividends.
• For non-doms, so far, dividends have been subject to a capped minimal 2.65% healthcare contribution on dividends up to €180,000. Seems like it continues to apply.

https://taxnews.ey.com/news/2025-0579-cypriot-government-announces-tax-reform-measures

 

[Marzio]

Malta is definitely more attractive.

Don said:
Anti-abuse rules will be introduced for disguised dividends.
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This is the kicker since everyone and their dog are managing US LLC pretending to receive dividends.

 

[Don]

Marzio said:
Malta is definitely more attractive.



This is the kicker since everyone and their dog are managing US LLC pretending to receive dividends.
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It's not easy to beat paying just 5% CIT and 5k flat personal income tax per year.

 

[ilke]

EUSSR doing EUSSR things...

Marzio said:
Malta is definitely more attractive.
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I would argue nothing in the EU is particularly attractive, but it is a decent choice in its current state.

 

[Marzio]

ilke said:
I would argue nothing in the EU is particularly attractive, but it is a decent choice in its current state.
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I bet Malta will be forced to change by EU idiocrats its full imputation system and there will not be any option left in EU to optimize taxes.

 

[Doji]

Don said:

• A New annual fee of €5,000 for individuals who have received the non-dom status

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Source for this?

 

[Thomas67]

Don said:
In Cyprus, there are some tax changes ahead:

• The corporate income tax rate would be increased from 12.5% to 15% for all corporations.
• A New annual fee of €5,000 for individuals who have received the non-dom status
• For normal Cyprus tax residents, the existing SDC on rental income would be abolished, and the SDC rate on dividends would be reduced from 17% to 5% for natural persons who are tax residents and domiciled in Cyprus. Anti-abuse rules will be introduced for disguised dividends.
• For non-doms, so far, dividends have been subject to a capped minimal 2.65% healthcare contribution on dividends up to €180,000. Seems like it continues to apply.

https://taxnews.ey.com/news/2025-0579-cypriot-government-announces-tax-reform-measures
Click to expand...

Many thanks for the proactive overview and related source

Bad news for the 5k annual non dom fee (I assume for all non doms, not only new ones), it's the price or more than the price of a company set up

 

[dziter]

Does anyone have a "reliable" source mentioning this non-dom annual fee?
I do not see anything online. If it's the case, I believe many people will move out.

Can you even get rid of this non-dom status to avoid this fee?

 

[Thomas67]

As a complement, I've found the following, incl. its FAQ: https://sunshadowinvest.com/cyprus-...are certain fees,who have received the status.
https://sunshadowinvest.com/cyprus-...re certain fees,who have received the status.

 

[Doji]

Thomas67 said:
As a complement, I've found the following, incl. its FAQ: https://sunshadowinvest.com/cyprus-non-domiciled-status-program/#:~:text=Yes, there are certain fees,who have received the status.
https://sunshadowinvest.com/cyprus-non-domiciled-status-program/#:~:text=Yes, there are certain fees,who have received the status.
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That's the only "source" I found as well. Hope it turns out false. 15% + 5k + 4.7k (2.65%) is getting too ridiculous.

 

[mrpayments]

from the EY link - "The current applicable period (17 years) of non-domicile status for individuals would not change, although an option for extending the period will be provided with the imposition of an annual fee."

I read that as meaning that if you want to extend the non-dom status past 17 years you can pay a fee from year 18 onwards. No mention of 5000 EUR being the fee apart from the Sun Shadow Invest link?

 

[Thomas67]

mrpayments said:
from the EY link - "The current applicable period (17 years) of non-domicile status for individuals would not change, although an option for extending the period will be provided with the imposition of an annual fee."

I read that as meaning that if you want to extend the non-dom status past 17 years you can pay a fee from year 18 onwards. No mention of 5000 EUR being the fee apart from the Sun Shadow Invest link?
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Interesting comment. I've asked SunShadowInvest for their official source.

 

[CyprusLaw]

Thomas67 said:
Interesting comment. I've asked SunShadowInvest for their official source.
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There is no such thing as an annual fee for non doms, this was never announced and never discussed. Also, all of the above, such as the CIT increase are just proposals, nothing has been passed yet, and nothing will pass until at least 2026

 

[Matade]

CyprusLaw said:
There is no such thing as an annual fee for non doms, this was never announced and never discussed. Also, all of the above, such as the CIT increase are just proposals, nothing has been passed yet, and nothing will pass until at least 2026
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Where can we read about it once its approved?

 

[Matade]

Marzio said:
Malta is definitely more attractive.
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No, it's too tiny of a place.

 

[Frankie]

Don said:

• A New annual fee of €5,000 for individuals who have received the non-dom status

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This is not mentioned anywhere, certainly not in the source you have posted.

 

[marioIT]

yeah cannot find sources mentioning the 5k for non-doms anywhere.

here a longer explanation of proposed changes:
(no affiliation with them)
Cyprus Tax Reform 2025: Key Changes and Impact on Businesses, Investors, and UBOs

It also talks about
- Stricter Substance Requirements, local offices, employees or management personnel, and verifiable decision-making in Cyprus
- controlled foreign company (CFC) rules have been strengthened , ensuring that profits parked in low-substance entities may be taxed currently in the parent's jurisdiction if substance is lacking.
- Changes in Transfer Pricing Regulations, integrating the latest OECD standards into local law, arm's length etc

Important Note: As of March 2025, these reforms remain proposals and have not yet been enacted into law. Businesses should monitor legislative updates closely and prepare for possible implementation later in the year, but should not treat the proposals as current law until formally passed by the Cyprus Parliament and published in the Official Gazette.
Click to expand...

 

[Thomas67]

marioIT said:
yeah cannot find sources mentioning the 5k for non-doms anywhere.

here a longer explanation of proposed changes:
(no affiliation with them)
Cyprus Tax Reform 2025: Key Changes and Impact on Businesses, Investors, and UBOs

It also talks about
- Stricter Substance Requirements, local offices, employees or management personnel, and verifiable decision-making in Cyprus
- controlled foreign company (CFC) rules have been strengthened , ensuring that profits parked in low-substance entities may be taxed currently in the parent's jurisdiction if substance is lacking.
- Changes in Transfer Pricing Regulations, integrating the latest OECD standards into local law, arm's length etc
Click to expand...

Many thanks, clear and insightful about the current proposals being discussed. By curiosity, how easy is it to ensure the follow-up of new publications/decrees in the Official gazette?

 

[dandiskahn]

CyprusLaw said:
There is no such thing as an annual fee for non doms, this was never announced and never discussed. Also, all of the above, such as the CIT increase are just proposals, nothing has been passed yet, and nothing will pass until at least 2026
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when you say "nothing will pass until at least 2026" you mean that the law will probably be passed next year and implemented even further down the line (maybe 2027), or that these changes would be passed in 2025 and implemented in 2026?

 

[AtlasShrugged]

dandiskahn said:
when you say "nothing will pass until at least 2026" you mean that the law will probably be passed next year and implemented even further down the line (maybe 2027), or that these changes would be passed in 2025 and implemented in 2026?
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That guy has a bias because he makes money out of users here on OCT. Any tax hikes will discourage entrepreneurs moving to Cyprus, which will affect his income.

It's better to do your own research, but it seems like every jurisdiction is moving in this direction, especially within the EU since the war mongers need your money to fund their wars . The only countries that are left, with decent taxes within the EU, are Bulgaria, Malta and Cyprus (for now). I really don't expect any of them to last much longer.