Non-dom status in Cyprus

“Non-dom” is not a visa and it is not a flat tax on everything. On the Tax Department’s own page it is a status for Special Defence Contribution. An individual who is not domiciled in Cyprus, or who is not tax resident at all, is outside that contribution on interest and on dividends. Rental income was inside the contribution up to and including the 2025 tax year. From 2026 the Department says the charge on rent was abolished, including for people who are domiciled. Non-dom status therefore no longer does any work on rent. It still does work on dividends and interest.

Domicile of origin, and the exceptions

The Special Defence Contribution Law uses domicile in the sense of the Wills and Succession Law. As a general rule, domicile of origin follows the father at birth, and in some cases the mother. A person whose domicile of origin is in Cyprus is domiciled here unless an exception applies.

The Tax Department describes two exceptions for someone with a Cyprus domicile of origin. One is that the person has acquired and keeps a domicile of choice abroad, and was not a Cyprus tax resident for at least 20 consecutive years before the tax year in question. The other is that the person lived abroad for more than 20 consecutive years before 16 July 2015. These are narrow. A few years abroad do not create them.

The 17-out-of-20 deeming rule

Whatever the domicile of origin, a person who has been Cyprus tax resident for at least 17 of the 20 years immediately before the tax year is deemed to be domiciled in Cyprus. The deemed domicile stays until the person has 20 years of non-residence. This is the rule that ends a long non-dom period. It does not look at passports. It looks at tax residence, which is the 183-day rule or the 60-day rule.

Someone who arrives and becomes tax resident in year one is not deemed domiciled in year one. The 17-year count is of prior years. Planning that ignores the count tends to discover it in year 18, when the dividends are already in the return.

What the exemption actually covers

The Department lists the income that is outside Special Defence Contribution for a non-domiciled person: interest, and dividends. It also lists rental income with a footnote that the rental charge stopped after 2025. Income tax is a different statute. Employment income, trading profits and Cyprus rent are still in income tax if the rest of the Income Tax Law says so. A non-domiciled tax resident does not have a blanket exemption from Cyprus tax.

From 2026, dividends received by a person who is both resident and domiciled are generally at 5 per cent Special Defence Contribution rather than the old 17 per cent, with a grandfathering rule. PwC’s 2026 facts book says dividends out of profits earned up to 31 December 2025, if received by 31 December 2031 from a Cyprus company, can stay at 17 per cent. A non-domiciled person is outside the contribution entirely, which is why the status still matters after the rate cut. The grandfathering is a reason to ask which year’s profits a dividend is paid from, not a reason to guess.

There is an anti-avoidance side. The Department points to the law and to circulars. A structure that exists only to dress trading income up as a dividend is not something this page will bless. The exemption is for the income the statute describes.

The 2026 election to extend

A person who did not have a Cyprus domicile of origin, but who has become deemed domiciled only because of the 17-out-of-20 rule, may elect an alternative method. The Tax Department says the exemption can be extended for two further periods of five years, by paying €250,000 for each five-year period, under Article 3D of the Special Defence Contribution Law and circular 02/2026. PwC describes the same payment. It is not a general product anyone can buy on arrival. It is an election for a person who is already deemed domiciled by the 17-year rule, and who did not start with a Cyprus domicile of origin. The circular is in Greek. Read it, or have it read, before paying.

The Department also says a person who believes they are not domiciled can apply for the exemption on form T.F.38. The form is the administrative step. It does not create the status if the facts do not.

What to keep

Keep the evidence of tax residence for each year you want counted, or not counted: days, the home, and the employment or directorship if you use the 60-day rule. Keep the dividend vouchers and the company’s accounts that show which year’s profits were distributed. If you are close to 17 years, get the count done before a large distribution, not after the assessment.

Non-dom status does not help with capital gains tax on Cyprus property, which is charged without regard to domicile. It does not help with VAT. It does not give immigration permission. Those are separate pages on this site because they are separate laws.