Non-domicile regime

On 9 July 2015 Cyprus introduced much anticipated legislation regarding ‘non-domiciled persons' which provides that such persons resident in the Republic are no longer liable to pay what is known as a Special Defence Contribution (SDC) on certain types of worldwide income from dividends (17%), bank deposit interest (30%) and rental income (3%).

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On 9 July 2015, Cyprus introduced much anticipated legislation regarding ‘non-domiciled persons'. This legislation provides that such persons resident in the Republic are no longer liable to pay what is known as a Special Defence Contribution (SDC) on certain types of worldwide income from dividends (17%), bank deposit interest (30%) and rental income (3%).

According to the Interpretations in Part I of the Cyprus Income Tax Law 2002, residency for individuals in Cyprus is determined by the number of days each person spends in the Republic during each calendar year (183 days)*. Prior to the new legislation, all residents were subject to SDC.

An individual is considered as domiciled in Cyprus by way of domicile of origin or by domicile of choice. Additionally, an individual who has spent 17 out of the last 20 years as a tax resident of Cyprus will be considered to be domiciled in Cyprus; whilst an individual who has Cyprus as his domicile of origin shall be considered NOT to be domiciled in Cyprus provided he was not a Cyprus tax resident for at least 20 years before the year he becomes tax resident in Cyprus.

Subject to certain anti-avoidance provisions, such new legislation is intended to attract a greater number of high net worth individuals to Cyprus, where it is hoped they would be encouraged to base their operations and achieve greater benefit from Cyprus' competitive tax regime and international treaty network.

Should you need any advice on the non-domicile regime, the citizenship or residence schemes, or our Cyprus corporate and trust services, please complete the enquiry form and one of our Corporate and Trust Planning Consultants will contact you shortly.

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*Resident in the Republic', when applied to an individual, means an individual who stays in the Republic for a period or periods exceeding in aggregate 183 days in the ‘year of assessment' (i.e. the period of 12 months commencing on the 1st January of each year).

For the purposes of calculating the days of stay in the Republic:

i. The day of departure from the Republic shall be deemed to be a day outside the Republic
ii. The day of arrival in the Republic shall be deemed to be a day in the Republic
iii. The arrival to the Republic and the departure from the Republic shall be deemed to be a day in the Republic
iv. The departure from the Republic and the return to the Republic in the same day shall be deemed to be a day outside the Republic

 

Jordans Trust Company (Cyprus) Limited.
2nd Floor, Sotiri Tofini 4,
Agios Athanasios,
Limassol 4102,
Cyprus
 

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