Date
Oct 19, 2024
Reading Time
3
min read
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Tax Guide: Cyprus – A Tax Haven for Global Citizens
Date
Oct 19, 2024
Reading Time
3
min read
Share on
Cyprus is a highly attractive destination for individuals seeking to reduce their tax liabilities, especially those moving from high-tax countries like the UK. The country offers a range of favorable tax regimes, including capital gains exemptions and incentives for expatriates. This guide provides an overview of Cyprus’s tax residency rules, capital gains taxation, and the 17-year special tax regime, highlighting how individuals with substantial capital gains can benefit from relocating to Cyprus.
Tax Residency in Cyprus
To qualify as a tax resident in Cyprus, individuals must meet one of the following criteria:
- 183-Day Rule: You are considered a Cyprus tax resident if you spend more than 183 days in the country during a calendar year.
- 60-Day Rule: You can also qualify with just 60 days of presence, provided you meet certain conditions like having a permanent home in Cyprus, conducting business, and not spending more than 183 days in another country.
Taxation of Capital Gains
Cyprus is particularly advantageous for individuals looking to minimize taxes on capital gains:
- Capital Gains Tax (CGT): Cyprus does not levy CGT on gains from foreign assets. Only gains from the disposal of immovable property located in Cyprus are subject to a 20% tax.
Trust and Wealth Planning Opportunities
In addition to its attractive tax regime, Cyprus is an excellent jurisdiction for trust and wealth planning. The Cyprus International Trust (CIT) offers a highly flexible and tax-efficient structure for asset protection, estate planning, and wealth management. CITs benefit from robust legal protection and can be used to hold foreign assets with significant tax advantages, particularly for high-net-worth individuals looking to safeguard their global wealth. The CIT framework is compliant with international standards, making Cyprus a secure and transparent jurisdiction for managing complex family trusts and global assets.
The Special 17-Year Tax Regime for Expats
Cyprus offers a special tax regime for expatriates that lasts for 17 years, designed to attract high-income individuals:
- 50% Income Tax Exemption: Individuals earning over €100,000 per year from Cyprus-based employment can enjoy a 50% income tax exemption for 17 years.
- Non-Domiciled (Non-Dom) Status: Non-doms are exempt from taxes on dividends, interest, and rental income sourced from abroad, creating additional tax-saving opportunities.
Potential Tax Savings for Individuals Leaving the UK
For UK residents, Cyprus presents significant tax-saving opportunities, particularly for those with large capital gains or substantial foreign-sourced income. The non-dom status and capital gains exemptions can lead to considerable tax reductions compared to the high tax rates imposed in the UK.
Conclusion: Why Choose Cyprus?
Cyprus offers an ideal combination of favorable tax policies and wealth management structures, making it a top destination for individuals with significant capital gains and global assets. Whether it's tax residency, capital gains optimization, or wealth planning through trusts, Cyprus provides a stable and tax-efficient environment for high-net-worth individuals.
Travels & Savings, The Tax Firm for Global Citizens, is dedicated to helping you navigate international tax systems and make the most of your relocation. Whether you’re seeking to minimize your tax liability, manage wealth efficiently, or ensure compliance with global tax regulations, our team is here to guide you every step of the way.
