Non-dom resident status Cyprus

[georgio]

Hello,

In your experience, how easy would it be for your home country to accept that you are a non-dom resident in another country, where you live more than 2 months and less than 183 days (Cyprus).

In my home country there seems to be a rule that you need to live more than 183 days in another country and have an income/renting a house there to be accepted as resident abroad.

Plus, to become a non-dom in Cyprus, there seems to exist a requirement that you need to not be a resident in another country.

So non-dom resident in Cyprus seems to be not interesting? (Appears that you will be a non-dom in Cyprus, pay taxes there, and then get taxed in your home country too).

Let me know if anyone has done this non-dom.

Cheers

 

[CyprusLaw]

Just to clarify, to be a Cyprus tax resident you need to spend at least 60 days in Cyprus and not spend more than 183 in any other jurisdiction (together with satisfying other requirements). Usually the tax residency is determined by the number of days you live in a country, so it is unlikely that your Cyprus tax residency will be challenged by any other jurisdiction unless you stay for over 183 days there. Also, prior to moving your tax residency you need to take care of any exit taxes to ensure that no issues will arise in the future.

Please give us further information about circumstances and current tax residency to be able to have a clearer picture.

 

[heliotrope]

Also you're confusing tax residence with non-dom. They are two separate points. This may help you make sense of some of the existing documentation. It's worth having a look at the very simple application form for non-dom to see the requirements.

 

[georgio]

CyprusLaw said:
Just to clarify, to be a Cyprus tax resident you need to spend at least 60 days in Cyprus and not spend more than 183 in any other jurisdiction (together with satisfying other requirements). Usually the tax residency is determined by the number of days you live in a country, so it is unlikely that your Cyprus tax residency will be challenged by any other jurisdiction unless you stay for over 183 days there. Also, prior to moving your tax residency you need to take care of any exit taxes to ensure that no issues will arise in the future.

Please give us further information about circumstances and current tax residency to be able to have a clearer picture.
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For example, let's say I plan to move to Cyprus in 2022, with non-dom status and an ltd there. in my country of residency (and citizenship by origin), I have to declare and prove in early 2023 (till March), that for 2022 I was a resident in another country.

The issue is that my current country of residency (Greece) has as a rule that you need to spend 183 days or more in another nation + renting a flat there + job or unemployment there, to be declared in 2023 as a foreign tax resident for 2022, and therefore pay no income tax in your global income.

heliotrope said:
Also you're confusing tax residence with non-dom. They are two separate points. This may help you make sense of some of the existing documentation. It's worth having a look at the very simple application form for non-dom to see the requirements.
Click to expand...

Thanks for the document. To my understanding, you are considered as a non-dom tax resident in Cyprus, and you get a non-dom exemption from the Special Contribution for the Defense Fund.

 

[CyprusLaw]

georgio said:
For example, let's say I plan to move to Cyprus in 2022, with non-dom status and an ltd there. in my country of residency (and citizenship by origin), I have to declare and prove in early 2023 (till March), that for 2022 I was a resident in another country.

The issue is that my current country of residency (Greece) has as a rule that you need to spend 183 days or more in another nation + renting a flat there + job or unemployment there, to be declared in 2023 as a foreign tax resident for 2022, and therefore pay no income tax in your global income.

Thanks for the document. To my understanding, you are considered as a non-dom tax resident in Cyprus, and you get a non-dom exemption from the Special Contribution for the Defense Fund.
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For Cyprus if you satisfy the 60-day rule requirements you are considered a tax resident then. You should get advice from a Greek advisor as well as to how this will be treated in Greece. As we have a lot of Greeks setting up structures in Cyprus.

 

[georgio]

CyprusLaw said:
For Cyprus if you satisfy the 60-day rule requirements you are considered a tax resident then. You should get advice from a Greek advisor as well as to how this will be treated in Greece. As we have a lot of Greeks setting up structures in Cyprus.
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So actually is it true that residents in Cyprus (>6 months) have to pay 17% military tax on dividends? (After the 12.5% corporate tax is extracted, on net profit). Even if they are not citizens and have not a Cypriot passport?

 

[heliotrope]

georgio said:
So actually is it true that residents in Cyprus (>6 months) have to pay 17% military tax on dividends? (After the 12.5% corporate tax is extracted, on net profit). Even if they are not citizens and have not a Cypriot passport?
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A big fat Nope. The nondom exemption lasts 17 years.

 

[CyprusLaw]

georgio said:
So actually is it true that residents in Cyprus (>6 months) have to pay 17% military tax on dividends? (After the 12.5% corporate tax is extracted, on net profit). Even if they are not citizens and have not a Cypriot passport?
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Exactly ad Heliotrope said it. Non-dom residents are exempted from SDC on dividend for 17 years. So your obligations are 12.5% corp tax and 2.65% contribution to the general health system

 

[georgio]

CyprusLaw said:
Exactly ad Heliotrope said it. Non-dom residents are exempted from SDC on dividend for 17 years. So your obligations are 12.5% corp tax and 2.65% contribution to the general health system
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Yes for the non-dom, but my question was for a 'normal' residency (more than 6 months), which is not a non-dom..

 

[CyprusLaw]

georgio said:
Yes for the non-dom, but my question was for a 'normal' residency (more than 6 months), which is not a non-dom..
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You are confusing this. Even if you relocate to Cyprus permanently you maintain the non dom status for 17 years.

 

[georgio]

CyprusLaw said:
You are confusing this. Even if you relocate to Cyprus permanently you maintain the non dom status for 17 years.
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Ok, so I will move and live in Cyprus all year long, with a rented flat there, and I will be considered non-dom for Cyprus? (Even if living there more than 6 months a year?)

 

[CyprusLaw]

georgio said:
Ok, so I will move and live in Cyprus all year long, with a rented flat there, and I will be considered non-dom for Cyprus? (Even if living there more than 6 months a year?)
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Correct. The 6 months you have in mind relate to the tax residency, you can become a tax resident through the 183-day rule or through the 60-day rule. But you still maintain your non dom status

 

[ilpablo]

Hi everyone.

To become tax resident in Cyprus you can:

- reside there for 60 days, rent a property for the whole year and be the owner/manager/director/employes of a Cyprus company
- reside there for 60 days, rent a property for the whole year and show an annual income of more than 40k

Is the second option true?

Also as Cyprus resident, what would be better to do with your foreign companies (UK ltd, UK llp or Romania).

thanks!

 

[CyprusLaw]

ilpablo said:
Hi everyone.

To become tax resident in Cyprus you can:

- reside there for 60 days, rent a property for the whole year and be the owner/manager/director/employes of a Cyprus company
- reside there for 60 days, rent a property for the whole year and show an annual income of more than 40k

Is the second option true?

Also as Cyprus resident, what would be better to do with your foreign companies (UK ltd, UK llp or Romania).

thanks!
Click to expand...

The second part is not valid.

 

[CyprusLaw]

ilpablo said:
Hi everyone.

To become tax resident in Cyprus you can:

- reside there for 60 days, rent a property for the whole year and be the owner/manager/director/employes of a Cyprus company
- reside there for 60 days, rent a property for the whole year and show an annual income of more than 40k

Is the second option true?

Also as Cyprus resident, what would be better to do with your foreign companies (UK ltd, UK llp or Romania).

thanks!
Click to expand...

To become a Cyprus tax resident on the basis of the “60-day rule” the individual must meet all of the following conditions:

• Remain in Cyprus for at least 60 days during the tax year in question; and
• Do not reside in any other single state for a period exceeding 183 days; and
• Is not tax resident in any other state; and
• Carry out business activities and/or work in Cyprus and/or be a director in a company that is tax resident in Cyprus at any time of the tax year in question; and
• Maintain a residence in Cyprus (at least one year rental contract if you will be renting)

 

[martinmueller]

CyprusLaw said:
To become a Cyprus tax resident on the basis of the “60-day rule” the individual must meet all of the following conditions:

• Remain in Cyprus for at least 60 days during the tax year in question; and
• Do not reside in any other single state for a period exceeding 183 days; and
• Is not tax resident in any other state; and
• Carry out business activities and/or work in Cyprus and/or be a director in a company that is tax resident in Cyprus at any time of the tax year in question; and
• Maintain a residence in Cyprus (at least one year rental contract if you will be renting)

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Thank you, the conditions are very clear.
One question, though: If I found a Ltd in Cyprus that I am a director of and if this company does not make any money (and does not do any business at all), will it be shut down by the authorities in Cyprus?
As a perpetual traveller living off dividends and income from options trading I can sustain myself, however, I do not want to stay in Cyprus for the 183+ days that are normally required for a HNWI to be tax resident in Cyprus.

 

[uplana]

martinmueller said:
One question, though: If I found a Ltd in Cyprus that I am a director of and if this company does not make any money (and does not do any business at all), will it be shut down by the authorities in Cyprus?
Click to expand...

no it will not, as long as you file dormant account with your accountant the company stays active but just dormant,

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[Ready to discuss]

Just to add that in order to remain active, I addition to the dormant accounts & tax return, you need to submit to the Cyprus Companies Registrar the Annual Return.

 

[mrb]

CyprusLaw said:

• Carry out business activities and/or work in Cyprus and/or be a director in a company that is tax resident in Cyprus at any time of the tax year in question; and

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Then how can you become a tax resident on your retirement ?

 

[CyprusLaw]

mrb said:
Then how can you become a tax resident on your retirement ?
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The requirement for running a busines/having a company is for the 60-day rule, othrwise you can become a Cyprus tax resident by staying 183 days in Cyprus per year.