Cyprus Tax Residency Rules Explained

Cyprus Tax Residency Rules Explained

Cyprus continues to attract individuals and businesses looking for a competitive tax environment within the EU. One of the most common questions we hear at LCK Financial Services is: “Am I considered a Cyprus tax resident?” The answer depends on clear rules set out by the Cyprus tax authorities — rules that have recently been updated and clarified for 2025.

In this guide, we break down the essentials in plain language, answer frequently asked questions, and share practical examples to help you understand how Cyprus tax residency works in practice.

Quick Answer: Who Qualifies as a Cyprus Tax Resident in 2025?

In 2025, you are considered a Cyprus tax resident if you meet either of the following:

• You spend 183 days or more in Cyprus in a calendar year, or

• You spend at least 60 days in Cyprus, are not tax resident anywhere else, do not exceed 183 days in another country, and maintain strong personal and business ties to Cyprus (including a permanent residence here).

The Two Routes to Cyprus Tax Residency

Cyprus offers two separate tests for individuals to qualify as tax residents:

The 183-Day Rule

This is the traditional test followed in many countries.

If you spend 183 days or more in Cyprus within a calendar year, you are automatically considered a Cyprus tax resident.

Simple, straightforward, and widely used by expatriates and locals alike.

The 60-Day Rule

Introduced to provide flexibility, the 60-day rule allows individuals to become tax residents even if they spend fewer days in Cyprus — provided certain conditions are met.

You qualify if in the relevant year you:

• Spend at least 60 days in Cyprus, and

• Are not tax resident in any other country, and

• Do not spend more than 183 days in another country, and

• Have strong ties to Cyprus (such as being employed here, carrying out business here, or holding a directorship in a Cyprus tax resident company), and

• Maintain a permanent residential property in Cyprus (owned or rented).

This rule has been especially attractive for entrepreneurs, digital nomads, and international executives who split their time between countries.

Counting Days: How It’s Done

For both rules, day counting follows a specific formula:

• A day in Cyprus includes any day you arrive.

• A day out of Cyprus includes any day you depart.

• If you both arrive and depart on the same day, it counts as one day in Cyprus.

These small details matter — especially for those planning their travel calendars carefully.

What Changed in 2025?

The 2025 update has mainly clarified the application of the 60-day rule:

• Authorities have reinforced the requirement that an individual cannot be a tax resident elsewhere. Even minimal ties to another jurisdiction (e.g. property ownership combined with days spent) could challenge Cyprus residency.

• There is now closer monitoring of the “permanent residential property” condition, with authorities requesting evidence of real occupation or long-term rental agreements.

• Enhanced cross-border information exchange under EU rules means double claims of residency are more easily detected.

In practice, the framework remains the same, but compliance checks are tighter — making proper planning and documentation more important than ever.

Practical Scenarios

To make this clearer, here are a few examples:

• The Expat Professional: Maria works between London and Limassol. She spends 200 days in Cyprus, so she qualifies under the 183-day rule.

  
  

• The Digital Nomad: David spends 70 days in Cyprus, 100 in Spain, and 100 in Dubai. He maintains a long-term rental in Limassol and is employed by a Cyprus-based tech company. He qualifies under the 60-day rule, provided he is not considered resident elsewhere.

  
  

• The Business Owner: Andreas owns a company registered in Cyprus. He lives abroad most of the year but spends 65 days in Nicosia, holds a directorship in his Cyprus company, and owns a flat in the city. He also qualifies under the 60-day rule.

These examples highlight why careful planning and professional advice matter. A few miscalculated days or unclear ties could risk your residency status.

Why Cyprus Tax Residency Matters

Becoming a Cyprus tax resident offers significant advantages, including:

• Flat 12.5% corporate tax rate (for company structures).

• Exemption on dividend and most interest income for non-domiciled individuals.

• No inheritance or wealth tax.

• Access to Cyprus’s double tax treaty network with over 65 countries.

For entrepreneurs, expats, and high-net-worth individuals, these benefits often translate into lower tax burdens and greater financial flexibility.

Looking Ahead: Cyprus Tax Reform and Residency

Cyprus is preparing for a broader tax reform, aiming to modernise its framework and align with international standards. While the 183-day and 60-day residency rules remain unchanged, the upcoming reform could affect the benefits attached to residency. Key expected changes include:

• Corporate tax alignment with OECD Pillar Two, setting a minimum effective rate of 15% for large multinational groups.

• Refinement of personal tax incentives, with more targeted reliefs to ensure compliance with EU state-aid rules.

• A shift towards green taxation, rewarding sustainable investments and behaviours.

• Greater digitalisation of tax administration, improving transparency and efficiency.

Residency will remain the gateway to accessing Cyprus’s tax regime, but individuals and companies should be prepared for evolving rules on incentives and corporate structures.

Compliance and Risks to Watch

While Cyprus is attractive, compliance is key. Common pitfalls include:

• Double residency claims: If another country argues you are also resident there, disputes can arise. Double Tax Treaties often resolve this, but documentation is vital.

• Weak residential ties: Owning or renting a property “on paper” without evidence of real use may not be enough.

• Miscounting travel days: Even one day wrongly calculated could shift your tax position.

At LCK, we often advise clients to keep meticulous travel records and retain copies of contracts, leases, and utility bills to prove their ties.

FAQs: Cyprus Tax Residency 2025

1. Is Cyprus still attractive for tax residency in 2025?

Yes. The combination of favourable personal and corporate tax rates, lifestyle benefits, and EU membership keeps Cyprus highly attractive.

2. Can I be a tax resident in Cyprus and another country at the same time?

It is possible, but usually resolved through double tax treaties, which assign residency based on “tie-breaker” tests such as your permanent home, centre of vital interests, or habitual residence.

3. Do digital nomads qualify for Cyprus residency?

Yes — if they meet the 60-day rule conditions, maintain a permanent residence, and ensure they are not resident elsewhere.

4. What documents do I need to prove Cyprus tax residency?

Typically, you need:

• Proof of days spent (flight tickets, passport stamps).

• Employment or directorship contracts in Cyprus.

• Lease or property ownership agreements.

• Utility bills or proof of residence.

5. Is the 60-day rule still valid in 2025?

Yes. The rule remains in force, though compliance checks have been tightened.

The Lifestyle and Business Edge

Tax residency in Cyprus isn’t just about numbers. For many, it’s also about lifestyle.

• Limassol attracts international entrepreneurs and startups.

• Nicosia serves as the administrative and financial hub.

• Paphos and Larnaca appeal to expats seeking quieter living.

Combined with an English-speaking business environment, good infrastructure, and EU protections, Cyprus provides both financial and lifestyle advantages.

Final Thoughts

Cyprus’s tax residency rules are designed to be clear and competitive. Whether you are considering the 183-day rule or planning strategically with the 60-day rule, it’s essential to keep good records, align your personal and business affairs properly, and stay updated with the latest requirements.

At LCK Financial Services, we help individuals and businesses navigate these rules, structure their affairs efficiently, and make Cyprus work for their long-term plans.