Non-dom exempts qualifying Cyprus tax residents from SDC on dividends and passive interest. It does not exempt salary income tax or applicable GESY contributions. Rental income is outside SDC for everyone from 2026.
Official Sources:
- Tax Department — Non-Domicile — Tax Department
- SDC Law 117(I)/2002 — domicile, rates and alternative charge
- Income Tax Law 118(I)/2002, section 2 — tax residence
What is non-dom status?
Definition
Non-dom concerns legal domicile, not birthplace or citizenship. A Cyprus tax resident with a domicile of origin outside Cyprus is generally exempt from SDC until deemed domiciled: tax residence in Cyprus in at least 17 of the 20 years preceding the current tax year. Statutory exceptions also exist for some people with a Cyprus domicile of origin. Assess those conditions individually.
What It Provides
| Income Type | Non-Dom (SDC) | Domiciled (2026) |
|---|---|---|
| Dividends | 0% | Generally 5% SDC; qualifying pre-2026 Cyprus-company profits retain 17% under the transition |
| Ordinary bank interest | 0% | Generally 17% SDC; statutory exemptions and the low-income refund rule require checking |
| Rental income | 0% SDC (but income tax applies) | No SDC from 2026; applicable income tax and GESY remain separate |
| Salary | Taxed the same | Taxed the same |
0% SDC is not necessarily zero total deductions. Applicable GESY contributions on dividends, interest and rent remain separate (generally 2.65% for income earners, subject to the combined €180,000 annual contribution base and exemptions). Foreign withholding taxes may also remain due. GESY.
2026 dividend transition: The general individual dividend SDC rate is 5%. However, dividends received from a Cyprus-resident company within the law’s six-year transition and paid from profits through tax year 2025 remain subject to 17% for individuals liable to SDC. Check the company, profit year and statutory conditions; non-dom eligibility remains a separate question. Rental SDC was abolished from tax year 2026. SDC law, sections 3 and 3B.
SDC (Special Defence Contribution) is separate from income tax and GESY contributions.
How this compares with the UK
The UK remittance basis ended on 6 April 2025. Eligible UK tax residents can claim the four-year foreign income and gains (FIG) regime after at least ten consecutive years of non-UK tax residence. It covers eligible foreign income and gains, requires a Self Assessment claim, and a claim removes specified allowances, including the Income Tax Personal Allowance and Capital Gains Tax annual exempt amount. The four-year window is consecutive; unused years cannot be rolled forward. HMRC.
Cyprus non-dom concerns SDC, not a blanket exemption for foreign income and gains. Compare the relevant income, residence and domicile rules before choosing a tax position.
Who Is NOT Non-Dom
People with a Cyprus domicile of origin who do not meet a statutory exception, or people deemed domiciled under the 17-of-20-tax-years test, are not entitled to the ordinary non-dom SDC exemption.
How does the 60-day rule work?
Why It Matters
The standard rule: you become a tax resident of Cyprus if you spend more than 183 days per year in the country.
The 60-day rule is an alternative path to tax residency for those who do not exceed 183 days.
Conditions (All Must Be Met Simultaneously)
- Spend at least 60 days in Cyprus during the tax year
- Not spend more than 183 days in any other single country
- Have a permanent home in Cyprus (owned or rented)
- Carry on business or be employed in Cyprus, and/or hold an office in a Cyprus tax-resident entity
All four conditions must hold: at least 60 days in Cyprus; no more than 183 days in another country; business, employment or an office in a Cyprus tax-resident entity; and a permanent Cyprus home owned or rented. The business/employment/office must not terminate during that tax year. From 2026, being tax resident elsewhere is no longer an exclusion.
Tax-year distinction: The official 2025 return guide requires that a person using the 60-day rule is not tax resident in another country. The current 2026 legislation removes that exclusion. Use the rule for the year being assessed. If two countries treat you as resident, check the applicable treaty and its residence provisions; domestic qualification alone does not settle treaty residence. Income Tax Law, section 2.
Check your actual circumstances
A company directorship or frequent travel does not by itself establish residence. Check all the conditions and keep evidence of days, the permanent home and the qualifying activity. Assess immigration permission separately.
How do I obtain non-dom status?
Process
The legal status follows the domicile rules, but claiming the exemption requires documentation. Submit the Tax Department’s TD38 declaration with TD38Qa, TD38Qb where applicable, and supporting documents to the district tax office where your file is maintained. TD38 is submitted in the first year of dividend/interest income for which exemption is claimed; some domicile-of-origin exception cases require renewal every three years. Merely ticking TD1 does not replace this declaration. TD38.
And the 60-Day Rule?
Residence follows the applicable legal test; a tax-return selection does not replace meeting it. Keep travel, home and qualifying-activity records. The 2025 return asks for residence information and worldwide income from residents; its 60-day conditions include the then-applicable other-country exclusion. The filing service also depends on the tax year: TAXISnet for 2017–2025, Tax For All for 2026 onwards, according to current Tax Department guidance. See the filing guide.
For a tax residence certificate, check the Tax Department’s TD126 process and supporting-document requirements; the certificate application is separate from the non-dom declaration. Official certificate guidance.
What does a practical example look like?
Illustration: A Cyprus tax resident receives €10,000 of foreign-company dividends that would attract the ordinary 5% SDC if domiciled. Compare the same income with and without a valid non-dom exemption; this is an SDC-only illustration.
| Without Non-Dom | With Non-Dom |
|---|---|
| Income tax on salary: same | Income tax on salary: same |
| SDC on dividends: €500 (5%) | SDC on dividends: €0 |
Savings: €500/year on €10,000 dividends. With larger dividend portfolios, the savings scale proportionally — on €100,000 of dividends, that’s €5,000/year.
What are the frequently asked questions?
Do I need to apply for non-dom separately? The legal status follows the domicile rules, but claiming the exemption requires documentation. Submit the Tax Department’s TD38 declaration with TD38Qa, TD38Qb where applicable, and supporting documents to the district tax office where your file is maintained. TD38 is submitted in the first year of dividend/interest income for which exemption is claimed; some domicile-of-origin exception cases require renewal every three years. Merely ticking TD1 does not replace this declaration.
Can I file for non-dom and the 60-day rule without an accountant? The TD38 declaration goes to the district tax office where your file is maintained. Tax-return services depend on the tax year, as described above. If you use an adviser, obtain a written fee quote and agree the scope.
Does non-dom exempt me from income tax? No. Income tax on salary is paid the same way. Non-dom only exempts you from SDC (on dividends and passive interest; rental SDC is abolished for everyone from 2026).
What happens after 17 years? Eligible individuals without a Cyprus domicile of origin who become deemed domiciled may elect alternative lump-sum SDC with Tax Commissioner approval: €250,000 paid upfront for each five-year period, by the end of the month following approval. An application is due by 30 June of the first year. Up to two periods are allowed (€500,000 for ten years). The election is irrevocable for each five-year period; paid amounts are non-refundable and cannot be offset against other tax liabilities or credits, and foreign-tax credit is unavailable against this charge. If payment is late, the alternative method does not apply. This is an alternative SDC charge. The current application instructions require submission through TFA Inbox. Official application instructions. SDC law, §3Δ.
Are there any catches? Cyprus tax residents must report worldwide income as required by the applicable return and filing rules. Non-dom does not remove reporting obligations. Check the filing obligation for the relevant tax year.
Assess residence and domicile separately, then check each income type’s tax and contribution treatment. For step-by-step filing instructions, see our guide to tax return filing in Cyprus. If you are considering a business structure, read our company registration guide.
Sources
- Tax Department — Non-Domicile — gov.cy
- SDC Law 117(I)/2002 — sections 2, 3, 3B and 3D
- Income Tax Law 118(I)/2002 — section 2 residence test
- TD38 declaration — questionnaires, district submission and renewal conditions
- Alternative SDC application instructions
- HMRC: four-year FIG regime
- Tax Department: filing individual returns
- GESY financing