Cyprus tax for non-residents.
What's taxed. What isn't. Non-residents are only taxed in Cyprus on Cyprus-sourced income. Dividends from Cyprus companies generally carry no withholding tax. Rental income from Cyprus property is taxable. Here's the full picture.
The short answer
Non-residents pay Cyprus tax only on Cyprus-sourced income, such as rent from Cyprus property or work done in Cyprus, through the normal bands where the first €22,000 is tax free. Dividends and interest from Cyprus companies generally carry no Cyprus withholding tax, and gains on Cyprus property are taxed at 20%.
- Tax-free band
- €22,000
- Top income tax rate
- 35%
- CGT on Cyprus property
- 20%
Non-residents and Cyprus tax — key principles
Cyprus operates a territorial tax system for non-residents — they are only taxed on income that has its source in Cyprus. This means a non-resident who owns Cyprus property and receives rental income is taxable in Cyprus on that rental, but their foreign income, foreign dividends and foreign capital gains are not subject to Cyprus tax.
Dividends paid by Cyprus companies to non-resident shareholders carry a 0% withholding tax rate — one of the most attractive features of Cyprus for international holding structures. This means profits can be distributed out of Cyprus to non-resident shareholders without any Cyprus tax leakage.
Non-resident with Cyprus income?
Ask Taxerly about treaty relief, rental income obligations, withholding tax and your Cyprus tax residency status.
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