Your liability for income tax in Cyprus depends on whether you’re officially resident there.

You qualify as a Cyprus tax resident if you spend more than 183 days in the country during the tax year and will be taxed in Cyprus on your worldwide income. However, irrespective of the 183-day rule, if your spouse and dependent minor children normally reside in Cyprus and have residence permits, and you aren’t legally separated, you’re considered to be a fiscal resident in Cyprus (unless you can prove otherwise).

If you’re a fiscal resident in two countries simultaneously, your ‘tax home’ may be resolved under the rules applied under international treaties. (Under such treaties you’re considered to be resident in the country where you have a permanent home; if you have a permanent home in both countries, you’re deemed to be resident in the country where your personal and economic ties are closer. If your residence cannot be determined under this rule, you’re deemed to be resident in the country where you have a habitual abode. If you have a habitual abode in both or in neither country, you’re deemed to be resident in the country of which you’re a citizen. Finally, if you’re a citizen of both or neither country, the authorities of the countries concerned will decide your tax residence between them!)

If you plan to live permanently in Cyprus, you should notify the tax authorities in your previous country of residence. You may be entitled to an income tax refund if you depart during the tax year, which usually requires the completion of a tax return. The authorities may require evidence that you’re leaving the country, e.g. proof that you have a job in Cyprus. If you move to Cyprus to take up a job or start a business, you must register with the local tax authorities soon after your arrival.

Moving to Cyprus (or any new country) often provides opportunities for legal ‘favourable tax planning’. To make the most of your situation, it’s advisable to obtain income tax advice before moving the Cyprus, as there are usually a number of things you can do in advance to reduce your tax liability, both in Cyprus and your home country. Be sure to consult a tax adviser who’s familiar with both the Cypriot system and that of your present country of residence.

Double Taxation

Cyprus has double-taxation treaties with Austria, Belarus, Belgium, Bulgaria, Canada, China, the Czech Republic, Denmark, Egypt, France, Germany, Greece, Hungary, India, Irealnd, Italy, Kuwait, Malta, Norway, Poland, Romania, Russia, Slovakia, South Africa, Sweden, Syria, the UK, the US and Yugoslavia.