Following the UK’s abolition of its non-dom regime in April 2025, demand for the Cyprus Non-Domiciled tax status has surged. The good news? Cyprus preserved its non-dom framework fully intact through the 2026 tax reform, making it one of the most attractive tax residency options in the EU.

What Is Non-Dom Status?

The Cyprus Non-Dom regime is a tax classification for individuals who are tax resident in Cyprus but not domiciled there. It exempts qualifying individuals from the Special Defence Contribution (SDC) on dividends and interest income for up to 17 years — and it is automatic, free to obtain, and has no minimum income requirement.

Full List of Tax Benefits

The Non-Dom status goes far beyond just dividend exemptions:

• Dividends: 0% SDC (domiciled residents now pay 5% under the 2026 reform)
• Interest income: 0% SDC (domiciled residents pay 17%)
• Securities gains: Profit from the sale of shares, bonds, debentures, and options is fully exempt from tax
• Capital gains on overseas property: Not taxed in Cyprus
• Wealth, inheritance, and gifts: Not taxed
• 50% employment income exemption: For new residents earning over €55,000 annually who were resident outside Cyprus for at least 15 consecutive years — valid for 17 years
• Overseas employment income: Services delivered outside Cyprus to a non-Cyprus employer for more than 90 days are not taxed
• Foreign pensions: Pensions over €3,420 from former overseas employment are taxed at only 5%
• Life insurance and provident funds: Lump sum payments are not taxed

What Changed in the 2026 Tax Reform

Preserved

• Non-Dom SDC exemption fully intact — no changes to the core framework
• The 17-year duration remains the same

New Changes

• 60-day rule relaxed: Cyprus removed the requirement that you must not be tax resident in another jurisdiction. This makes it easier for globally mobile individuals to qualify, though it increases the risk of dual residency (treaty tie-breakers become essential).
• Rental income SDC abolished for everyone: From January 2026, rental income is only subject to income tax — no more SDC.
• Deemed dividend rules abolished: Companies no longer distribute notional dividends on retained profits, giving shareholders more flexibility.
• New 5-year extension option: After the 17-year non-dom period ends, individuals can extend for another 5 years by paying a lump sum of €250,000. The election deadline is 30 June of the first election year.

GHS Contributions Still Apply

Dividends and interest remain subject to 2.65% GHS (GESY) contributions, but income subject to GHS is capped at €180,000 per year, resulting in a maximum annual contribution of €4,770.

How to Qualify

Step 1: Become a Cyprus Tax Resident

You can establish tax residency via two routes:

183-Day Rule: Spend at least 183 days in Cyprus per calendar year.

60-Day Rule (more flexible): Spend at least 60 days in Cyprus, provided you:

• Do not stay more than 183 days in any other single country
• Have a home in Cyprus (owned or rented)
• Are employed or run a business in Cyprus

Step 2: Confirm Non-Dom Status

If you were not born in Cyprus and have not been a tax resident of Cyprus for 17 out of the last 20 years, you automatically qualify as Non-Domiciled. There is no separate application — the status is automatic based on your domicile of origin.

Cyprus vs. Other EU Non-Dom Programs

Cyprus stands out for having no minimum investment or flat tax requirement — making it accessible to a much wider range of individuals.

How CYexpat Can Help

Securing Non-Dom status requires getting your tax residency right from the start. At CYexpat, we coordinate the entire process: from establishing residency and obtaining your Yellow Slip, to connecting you with qualified tax advisors for ongoing compliance. Book a free consultation to protect your wealth the smart way.