Cyprus Non-Dom for Ukrainian Residents — Military Levy, DTT and Special Residence

Ukraine taxes residents on worldwide income. Dividends are taxed at 18% personal income tax plus 1.5% military levy (воєнний збір) — a total of 19.5%. The military levy has been in effect since 2014 and was extended indefinitely. Foreign-source dividends are also taxed at 18% + 1.5% for Ukrainian residents, though foreign tax paid can be credited.

Ukrainian residency is based on the 183-day rule and the centre of vital interests test. If you spend 183+ days in Ukraine, you are resident. If you spend fewer than 183 days, you may still be resident if your centre of vital interests (family, economic ties) is in Ukraine. To cease being Ukrainian-resident, move both your physical presence and your centre of vital interests to Cyprus.

Foreign-source income: if you are a Ukrainian non-resident (fewer than 183 days, centre of life outside Ukraine), Ukraine taxes only Ukrainian-source income. Ukrainian dividends, Ukrainian rental income, and Ukrainian employment income are taxed at 18% + 1.5%. Foreign dividends and foreign interest are not taxed. The combination of Ukrainian non-resident status and Cyprus non-dom produces near-zero tax on foreign investment income.

Special wartime provisions: Ukraine has introduced various tax reliefs during martial law, including exemptions for certain individuals in occupied territories and affected areas. These are specific and change frequently. The core rules — 18% + 1.5% on dividends, 183-day residency test — remain in effect for most taxpayers. Check current provisions with a Ukrainian tax advisor before planning.

The Ukraine-Cyprus DTT is one of the most favourable treaties Cyprus has — dividend withholding is limited to 5% (not 15% as in most treaties). This makes Cyprus an attractive holding jurisdiction for Ukrainian business owners. Interest is 0%, royalties are 5%. The treaty has been in force since 1984 and was updated by protocol.

The 5% dividend rate is available if the beneficial owner holds at least 20% of the paying company's capital, or if the investment exceeds €100,000. Otherwise, the rate is 15%. For most Ukrainian business owners relocating to Cyprus, the 5% rate applies — making the effective tax on Ukrainian dividends 5% (withheld in Ukraine) + 0% SDC in Cyprus + 2.65% GHS = approximately 7.65% total.

The tie-breaker for dual residency: permanent home, centre of vital interests, habitual abode, nationality. Ukrainian nationality is the final tie-breaker. If you have a permanent home in Cyprus and your centre of vital interests is there, Cyprus wins.

Capital gains: the treaty allocates taxing rights on share disposals. Gains on shares in Ukrainian real property companies are taxed in Ukraine. Gains on other shares are taxed in the country of residence — so a Cyprus-resident non-dom selling non-real-estate Ukrainian shares pays 0% in Cyprus. However, Ukraine may assert taxing rights on gains from Ukrainian companies under domestic law — check the specific treaty provisions.

Ukrainian nationals have access to special residence provisions in Cyprus under the Temporary Protection Directive (for those displaced by the conflict) and through standard immigration routes. The Fast Track Permanent Residence Programme (€300,000 property purchase, €50,000 annual income) is available. Employment-based permits and the Digital Nomad Visa are also options.

Under temporary protection, Ukrainians who entered Cyprus after 24 February 2022 have access to residence, employment, and social services. This does not automatically confer tax residency — tax residency is still determined by the 183-day or 60-day rule. But it provides the legal basis to live and work in Cyprus while establishing tax residency.

The 60-day rule (from 2026, no non-residency requirement) is particularly relevant for Ukrainians who maintain ties to Ukraine. You need 60 days in Cyprus, under 183 in Ukraine, a Cyprus business tie, and a permanent residence. The centre-of-vital-interests test for Ukrainian residency is qualitative — moving your family and business to Cyprus is the strongest signal of non-residency.

If you are a Ukrainian national considering a move to Cyprus, the first step is confirming your domicile of origin is outside Cyprus — which it is, if your father was domiciled in Ukraine. Then establish tax residency through the 183-day or 60-day route, submit form TD38 to claim non-dom status, and begin tracking your 17-year clock.

For the residency mechanics, use our residency day checker. For the full non-dom rules, see the non-dom pillar page. Fifteen minutes with our advisory team will confirm whether you qualify, what it saves, and whether you are owed a DDD refund.