New tax residence provisions for individuals (“60-day rule”)

On the 14 July 2017, there has been an amendment to the Income Tax Law with regards to the criteria for an individual to be considered a tax resident of Cyprus. According to the amended legislation, an individual who does not remain in any other state for one or more periods exceeding 183 days in total during any given tax year, and who is not a tax resident in any other state for that year, shall be considered, for Cyprus tax purposes, to be a tax resident of Cyprus for the year in question.

Once the “60-day rule” is effective, as from tax year 2017, an individual will be considered as a tax resident of Cyprus if the individual satisfies either the current “183-day rule” or the new “60-day rule” for the tax year.

The “60-day rule” applies to individuals who in the relevant tax year:

(i) do not reside in any other single state for a period exceeding183 days in aggregate, and
(ii) are not tax resident in any other state, and
(iii) reside in Cyprus for at least 60 days, and
(iv) have other defined Cyprus ties (To satisfy this condition the individual must carry out any business in Cyprus and/or be employed in Cyprus and/or hold an office(director) of a company tax resident in Cyprus at any time in the tax year, provided that such is not terminated during the tax year. Further the individual must maintain in the tax year a permanent residential property in Cyprus which is either owned or rented by the individual)