Non-Dom in Cyprus: Your Guide to Tax Benefits
- TaxAdvisor.CY
- Jul 22, 2024
- 2 min read
Cyprus has emerged as a popular destination for individuals and businesses seeking tax-efficient solutions. One such solution is obtaining non-domicile (non-dom) status, which can lead to substantial tax savings. In this guide, we'll delve into the world of non-dom certificates in Cyprus, exploring the benefits, eligibility criteria and application process.
What is Non-Domicile Status in Cyprus?
Non-domicile status simply means that although you reside in Cyprus for tax purposes, your "domicile of origin" (your permanent home) remains elsewhere. Cyprus tax legislation grants this status automatically to individuals who relocate to Cyprus and become tax residents but a certificate asserting this status must be officially requested by the tax authorities in order to be able to claim the non-dom status and benefits.
Tax Benefits of Non-Dom Status in Cyprus
Non-dom status in Cyprus offers a range of attractive tax benefits:
Special Defence Contribution (SDC) Exemption: Non-doms are exempt from the SDC, a tax levied on certain types of income like dividends, interest and rental income.
This tax advantage can significantly reduce your tax burden and enhance your overall financial position if most of your income or a considerable portion is made up of dividends, interest and rental income.
Eligibility for Non-Domicile Status
To qualify for non-dom status in Cyprus, you must meet the following conditions:
Be a Tax Resident of Cyprus: This typically requires spending 183 days or more in Cyprus during a tax year.
Not Born in Cyprus (origin): You should not have been born in Cyprus or have a Cypriot parent.
Not Previously Domiciled in Cyprus (choice): You should not have been domiciled (i.e. physical presence with permanent residence) in Cyprus for 17 out of the last 20 years.
Declaration of Non-Domicile: You'll need to submit a Declaration of Non-Domicile to the Cypriot tax authorities. Otherwise, you cannot claim to be a non-dom.
It's crucial to consult with a tax advisor to assess your individual circumstances and ensure you meet all the requirements.
How to Apply for a Non-Dom Certificate
The application process for a non-dom certificate typically involves:
Gathering Documentation: Collect evidence of your non-dom status, such as birth certificates, proof of residence abroad, and other relevant documents.
Submitting the Application: Submit your completed Declaration of Non-Domicile along with supporting documents to the Cyprus Tax Department.
Review and Approval: The tax authorities will review your application and issue a non-dom certificate if you meet the criteria.
TaxAdvisor.cy can guide you through the entire application process, ensuring a smooth and successful outcome.
Conclusion
Non-domicile status in Cyprus offers a unique opportunity to optimize your tax situation and enjoy significant financial benefits. If you're considering relocating to Cyprus or have recently moved here, exploring the possibility of obtaining a non-dom certificate could be a wise decision.
Contact TaxAdvisor.cy today for a free consultation to discuss your individual circumstances and explore how we can help you navigate the complexities of Cyprus tax laws.
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