01Birth
Domicile of origin
The domicile you acquire at birth, normally your father's. A German founder born in Munich keeps a German domicile of origin however long he lives in Limassol, unless he is caught by the 17-year rule.
Special Defence Contribution · 2026 rules
Cyprus non-dom: whether you qualify, what it saves each year, and when your 17 years run out.
Non-dom status takes the 5% on dividends and 17% on interest off a Cyprus tax resident's passive income. It does not touch the 2.65% health contribution, and it ends after 17 years unless you pay €250,000 for each five-year extension. Check your status, set your clock and price the saving.
17Tax years of exemption before you are deemed domiciled
0%Contribution on dividends and interest for a non-dom, against 5% and 17%
€250kLump sum for each of up to two paid five-year extensions
2.65%Health contribution still due on passive income, up to €180,000
I.The rules
Every test, rate and deadline that decides your status.
Domicile is defined in the Wills and Succession Law. The deemed domicile test and the exemption sit in the Special Defence Contribution Law, which the reform of 22 December 2025 amended from 1 January 2026.
In law enacted, in force for 2026
Confirm sources differ, adviser to sign off
| Rule | Value | Status |
|---|---|---|
| Who pays Special Defence Contribution | Only individuals who are both tax resident and domiciled in Cyprus. A non-dom resident is outside it entirely | In law |
| Domicile of origin | Acquired at birth under the Wills and Succession Law, normally from your father. Birthplace and passport do not decide it | In law |
| Deemed domicile | Tax resident in Cyprus for at least 17 of the 20 years before the tax year, whatever your domicile of origin | In law |
| Exception for Cypriot origin | Domicile of choice abroad and at least 20 consecutive years outside Cyprus tax residence before the tax year. How long it lasts after return is read differently | Confirm |
| Dividends, domiciled resident | 5% on profits earned from 2026. 17% on pre-2026 profits distributed up to 31 December 2031 | In law |
| Interest, domiciled resident | 17%. 3% on Cyprus and EU government savings bonds and certain listed bonds | Confirm |
| Rent | Contribution on rent abolished for everyone from 1 January 2026. Rent is taxed under income tax only | In law |
| General Healthcare System | 2.65% on dividends, interest and rent, on total income up to €180,000 a year. Non-doms pay it too | In law |
| Paid extension | €250,000 lump sum for each five-year period, up to two periods. Irrevocable, non-refundable, only for a domicile of origin outside Cyprus | In law |
| Extension deadline | 30 June of the first year of the five-year period. Transitional deadline of 30 June 2026 for people deemed domiciled in 2024 to 2026 | Confirm |
| Tax residence, 183-day rule | More than 183 days in Cyprus in the calendar year | In law |
| Tax residence, 60-day rule | At least 60 days, no more than 183 in any other single state, a Cyprus home, and a Cyprus business, job or directorship. Not resident elsewhere is no longer required from 2026 | In law |
| Claiming the exemption | Declaration form T.D.38 to the payer, with domicile questionnaires where asked. Exempt income shown on the annual return | Confirm |
| Capital gains tax | 20%, only on Cyprus immovable property and shares deriving at least 20% of their value from it | In law |
| Crypto-assets | 8% on gains from disposal, separate from non-dom status, which does not cover them | In law |
| Foreign pension option | 5% on foreign pension above €5,000 a year, or normal income tax bands, chosen each year | In law |
II.The checker
Your status, and the year your exemption ends.
Answer for yourself, not your family. Domicile is personal, and so is the clock. The result drives the ring at the top of the page and the savings statement further down.
Eligibility and the 17-year clock
Instrument 1 of 3Origin
Residence
Count only years you were Cyprus tax resident in the 20 tax years before your current stay began. Most new arrivals enter 0.
Your clockExtension: reported, adviser to confirm
How it decides. Domicile of origin outside Cyprus plus fewer than 17 years of Cyprus tax residence in the 20 before the tax year means non-dom. The clock assumes you stay resident every year from the first year entered. Earlier residence years are treated as still inside the 20-year window for the whole period, which is cautious: as they drop out, the real end year can move later. For a domicile of origin in Cyprus, 20 consecutive years abroad is treated as meeting the exception, which also needs a domicile of choice abroad, and the 17-of-20 test is applied on top. The extension costs €250,000 per five-year period, up to two, applied for by 30 June of the first year, with a transitional deadline of 30 June 2026 for people deemed domiciled in 2024, 2025 or 2026. Current year taken as 2026. All to be confirmed by the adviser.
III.Explained
Eight terms that decide what you pay.
Most mistakes come from treating residence, domicile and the health contribution as one thing. They are three separate tests with three separate answers.
02Time
Deemed domicile
Seventeen years of Cyprus tax residence in the twenty before a tax year makes you domiciled for this contribution, whatever your origin. It is a count of years, not a choice you make.
03The tax
Special Defence Contribution
A separate tax on passive income for people resident and domiciled in Cyprus: 5% on dividends from 2026 profits, 17% on most interest. Non-dom status is an exemption from this tax alone.
04Health
General Healthcare System
The national health scheme, also called GESY. It takes 2.65% of dividends, interest and rent, on total income up to €180,000 a year, at most €4,770. Non-doms pay it.
05The clock
The 17-year clock
Arrive in 2026 and stay, and your exempt years are 2026 to 2042. In 2043 the twenty years behind you contain seventeen of residence, and you are deemed domiciled.
06Two tests
Tax residence against domicile
Residence asks where you spend the year, under the 183-day or 60-day rule. Domicile asks where you belong. Non-dom only matters once you are resident.
07Year 18
The extension
From 2026 a person whose domicile of origin is abroad can buy two further five-year periods of exemption for €250,000 each, paid up front and never refunded.
08Limits
What non-dom does not cover
Income tax on salary, rent and pensions, the health contribution, 20% gains tax on Cyprus property, 8% on crypto gains, and 15% corporation tax inside your company.
Residence first
Non-dom is not a residence status. You must be resident first.
People ask for "non-dom residency" as if it were a visa. It is not. Non-dom is a feature of a tax you only pay once you are already Cyprus tax resident, and it has no effect on its own.
Residence comes from your days and your ties. Spend more than 183 days in Cyprus in a calendar year and you are resident. Or use the 60-day rule: at least 60 days here, no more than 183 in any other single country, a home in Cyprus you own or rent, and a Cyprus business, job or directorship held all year. From 2026 you no longer need to show that you are not resident somewhere else.
A non-resident pays no defence contribution in the first place. Non-dom saves you nothing until the day you become resident.
The order matters for planning. Fix residence first, with a day log and the right paperwork, then claim the exemption on every dividend and interest payment. Our 60-day rule planner, linked below, maps the days.
The saving
What it saves, and what it does not.
The exemption is narrow and valuable. It removes one tax, on two kinds of income. Everything else in the Cyprus system still applies to you in full.
Removed for a non-dom
5% on dividends from 2026 profits, and 17% on dividends from older profits.
17% on bank and most bond interest.
The same exemption on dividends and interest from abroad.
Still payable
2.65% General Healthcare System on passive income, up to €180,000 of total income.
Income tax on salary, rent and pensions, at 0% up to €22,000 and up to 35%.
20% on gains from Cyprus property, 8% on crypto gains, 15% at company level.
Rent is a special case. The contribution on rent was abolished for everyone in 2026, so it is no longer part of the non-dom saving. A landlord gains nothing from non-dom status that a domiciled landlord does not also have.
Planning ahead
Planning for year 18.
Seventeen years feels like a lifetime when you arrive. It is not, and the last three are when the choices get expensive. From year 18 a domiciled resident pays 5% on dividends and 17% on interest. There are four honest options.
- Distribute earlier. Profits paid out while you are still non-dom carry no contribution. Retained earnings paid in year 18 carry 5%.
- Pay for the extension. €250,000 buys five more years. At 5% it only pays if dividends exceed €1,000,000 a year. The calculator below shows your break-even.
- Accept the rates. 5% on dividends is low by European standards, and for most people it is the right answer.
- Leave. Years abroad stop the count, but your new country will tax you. Model it properly before you move.
Whatever you choose, decide by year 15. The extension application is due by 30 June of the first year it covers, and the payment cannot be refunded if your plans change.
IV.Examples
Three clients, three different answers.
The figures use 2026 rates. Each person is tax resident under the 183-day rule and has no Cyprus salary unless stated.
€400,000 of dividends a year from his Cyprus company
German domicile of origin, first Cyprus tax year 2026, no earlier residence. He is non-dom from 2026 to 2042.
Contribution if domiciled, 5%€20,000
Contribution as non-dom€0
Health contribution, capped€4,770
German tax at 26.375%, for comparison€105,236
Non-dom, saving €20,000 a yearHis Cyprus cost on €400,000 is €4,770. The extension would not pay at this level: €100,000 of tax avoided over five years against a €250,000 fee. German exit tax on his shares when he leaves is a separate question for his German adviser.
Cypriot-born, back after 25 years in London
Domicile of origin in Cyprus. He lived and was UK tax resident for 25 consecutive years, owned a home in Richmond and intended to stay there until he retired. He has €50,000 of dividends and €27,000 of deposit interest.
Contribution if domiciled€7,090
Contribution if the exception applies€0
Health contribution€2,041
Likely non-dom, evidence neededThe 20-year exception should apply, but he must prove a domicile of choice in England. How long the exception lasts after he returns is read differently by advisers. He cannot buy the paid extension.
€60,000 a year of interest and dividends
British domicile of origin. €35,000 of dividends from UK shares and €25,000 of interest from bonds and deposits. His pension is taxed separately under the 5% option.
Dividends at 5% if domiciled€1,750
Interest at 17% if domiciled€4,250
Health contribution, both cases€1,590
Non-dom, saving €6,000 a yearOver 17 years that is €102,000 at today's income. His only Cyprus charge on the €60,000 is the €1,590 health contribution. The extension is far from worth it at this income.
V.The saving
Your year, set out as a statement.
Enter a typical year's passive income. The statement debits what a domiciled resident would pay against what you pay as a non-dom, and multiplies the difference by the exempt years left on your clock.
Annual saving statement
Instrument 2 of 3Passive income, per year
€
€
€
€
Compare with
£
Check the day's rate. Used to convert salary and dividends into pounds and the tax back into euros.Statement of passive incomeTAX YEAR 2026 · EUR
DateParticularsDomiciledNon-dom
Saving a year
Exempt years left
Saving to the end
Assumptions. Special Defence Contribution for a domiciled resident at 5% on dividends from 2026 profits, 17% on dividends from earlier profits, 17% on interest, and nothing on rent, which was abolished in 2026. The 3% rate on government savings bonds and certain listed bonds is not modelled. General Healthcare System at 2.65% on passive income, with salary using the €180,000 cap first. Income tax on rent and salary is the same in both cases and is left out. Exempt years left come from the checker above, at today's income with no growth. UK comparison: dividends only, 2026/27 rates of 10.75%, 35.75% and 39.35%, £500 allowance, £12,570 personal allowance tapered above £100,000, basic rate band £37,700, additional rate above £125,140. German comparison: dividends and interest at 25% plus solidarity surcharge, 26.375%, less the €1,000 saver allowance, no church tax. All to be confirmed by the adviser.
VI.Year 18
Is the extension worth paying for?
The fee is fixed. The saving depends on your income in years 18 to 27. This instrument finds the yearly passive income at which €250,000 breaks even.
Extension break-even
Instrument 3 of 3Expected income, years 18 to 27
€
€
The fee
€
The fee is set by law at €250,000. It is editable only so you can test a change. If you leave early, nothing is refunded.
One five-year periodEUR
Break-even passive incomeA YEAR
Assumptions. Contribution avoided at 5% on dividends from post-2026 profits and 17% on interest, the rates a domiciled resident would pay. Fee of €250,000 paid up front for each five-year period, irrevocable and not refunded if you leave. No discounting for the time value of money, which makes the extension look slightly better than it is. The second period is tested the same way. The health contribution is payable either way and does not affect the result. Only a person whose domicile of origin is outside Cyprus can apply. All to be confirmed by the adviser.
VII.The process
From arrival to year 18, in four steps.
There is no single non-dom application. Status is evidenced each time income is paid, and defended when the Tax Department asks.
Before you arrive
Document your domicile
Collect evidence of your father's domicile at your birth and of your life abroad. For anyone born in Cyprus or of Cypriot parents, this file is the whole case.
Birth certificate, parents' details, past addresses, foreign tax returns.Year 1
Become tax resident
Meet the 183-day rule, or the 60-day rule with a Cyprus home and a Cyprus business, job or directorship. Register for a tax identification number.
Day log, lease or title deed, employment contract or director appointment.First payment
Claim the exemption
Give the paying company or bank the non-dom declaration so no contribution is withheld, and show the income as exempt on your annual tax return.
Declaration T.D.38 and domicile questionnaires. Current versions to be confirmed by the adviser.Years 15 to 17
Plan for year 18
Decide whether to distribute early, pay for an extension or accept the domiciled rates. An extension must be applied for by 30 June of the first year it covers.
A five-year income forecast and the break-even test on this page.VIII.Questions
What new residents ask first.
Fourteen questions, answered plainly. Each carries the review date in this page's structured data.
Ask one we missed →01What does non-dom mean in Cyprus?
It means you are tax resident in Cyprus but not domiciled here for the Special Defence Contribution. That exempts your dividends and interest from the contribution, which a domiciled resident pays at 5% on dividends and 17% on interest. It is not a visa or a residence permit.
02How long does Cyprus non-dom status last?
Seventeen tax years of residence. In the year after the seventeenth, the twenty years behind you contain seventeen of residence and you are deemed domiciled. Someone resident from 2026 is exempt to the end of 2042. Since 2026 it can be extended twice by five years for a fee.
03Can I lose my non-dom status in Cyprus before 17 years?
Not through the passing of time alone. You can lose it if your domicile of origin turns out to be Cyprus, or if you acquire a domicile of choice here, which needs a clear intention to stay permanently. Losing tax residence also ends the benefit, although it then has nothing to exempt.
04Do I need to apply for non-dom status in Cyprus?
There is no formal grant. You claim it by declaration, on form T.D.38 to the company or bank paying you, and on your annual return. A written confirmation can be requested from the Tax Department, and people born in Cyprus or with Cypriot parents should expect a domicile questionnaire. The current forms are for the adviser to confirm. Keep the evidence from day one.
05Is non-dom the same as Cyprus tax residence?
No. Tax residence comes from the 183-day or the 60-day rule and decides whether Cyprus taxes you at all. Domicile decides whether one particular tax, the defence contribution, applies to your passive income. You need to be resident for non-dom to make any difference.
06Can a Cypriot qualify as non-dom in Cyprus?
Sometimes. A person with a Cyprus domicile of origin is treated as non-domiciled if they acquired a domicile of choice abroad and were not tax resident in Cyprus for at least 20 consecutive years before the tax year. Advisers read differently how long this lasts after return, so take advice before relying on it. The paid extension is not available to them.
07Does my spouse also get Cyprus non-dom status?
Not automatically. Domicile and the 17-year count are tested for each person, so each spouse needs their own declaration and file. A couple with different origins can have different answers, which matters when deciding who holds the shares or the deposits.
08What do I still pay on dividends as a Cyprus non-dom?
The General Healthcare System contribution of 2.65%, on total income up to €180,000 a year, so at most €4,770. No defence contribution and no income tax. Your company will already have paid 15% corporation tax on the profits behind the dividend.
09What is the 2026 Cyprus non-dom extension and who can use it?
A person whose domicile of origin is outside Cyprus, and who becomes deemed domiciled, can pay €250,000 to keep the exemption for five more years, and do it once more, to 27 years in all. The election is irrevocable and the fee is never refunded. The application is due by 30 June of the first year of the period. A transitional deadline of 30 June 2026 applied to people already deemed domiciled.
10Does Cyprus non-dom status cover crypto gains?
No. From 2026 gains on disposing of crypto-assets are taxed at a flat 8% under income tax, for domiciled and non-domiciled residents alike. Losses can only be set against crypto gains in the same year. Non-dom status covers dividends and interest only.
11Are foreign capital gains taxed in Cyprus?
Cyprus capital gains tax applies only to Cyprus immovable property and to shares that draw at least 20% of their value from it. Gains on foreign shares, funds and property are outside it, and gains on securities are exempt from income tax. This is true whether or not you are non-dom.
12Is there inheritance tax in Cyprus?
No. Estate duty was abolished from 1 January 2000 and there is no gift tax. Your heirs may still face tax in their own country, and the UK can reach a former long-term resident's estate for years after departure. Succession law is a separate question from tax.
13What happens to my Cyprus non-dom clock if I leave and come back?
The test looks at the twenty years before each tax year, so years abroad add nothing and old years drop out of the window. Leaving for a few years usually pushes your end year back. Some advisers read the law as keeping deemed domicile until you have spent twenty years away, so confirm before you plan around it.
14Does Cyprus non-dom status reduce tax on my salary or pension?
No. Salary is taxed under income tax from 0% to 35%, with a 50% exemption on pay above €55,000 for qualifying new arrivals. A foreign pension can be taxed at 5% above €5,000 a year. Both apply regardless of domicile.
Free checklist
Non-dom file: what to keep from day one to prove your status.
- Birth certificate and your father's domicile at your birth
- Proof of your permanent home abroad before you arrived
- A day log for every tax year, with boarding passes
- Cyprus lease or title deed, and your business, job or directorship
- Every non-dom declaration given to banks and companies
- Each year's tax return and a running 17-of-20 count
Request the checklist →
Two-page PDF, sent by the adviser. Ask for it in the form below.
Who stands behind this page
Aqualis Ltd, chartered accountants in Nicosia.
Aqualis advises founders, executives and families moving to Cyprus on residence, domicile and the defence contribution, and prepares the file that supports a non-dom claim. Its Updated Cyprus Non-Dom Guide was published in February 2026. The adviser named here signs off every figure on this page.
ICPAC memberICAEW memberEnglish and Greek
Tax adviser[name, title]
Office[address], Nicosia, Cyprus
Non-dom servicesaqualis.com.cy/non-dom
ResponseWithin one working day