You Can Now Be Cyprus Tax Resident in 60 Days Even If Another Country Still Claims You

Cyprus has offered a 60-day route to tax residency since 2017, and for most of that period it came with a condition that quietly excluded a large share of the people it was meant to attract. An applicant had to show, among other things, that they were not tax resident in any other state. For internationally mobile business owners – who frequently remain on another country’s register long after they have moved their life and their work – that single sentence was often the end of the conversation.

The tax reform package approved by the House of Representatives on 22 December 2025, published in the Official Gazette on 31 December 2025 and effective from 1 January 2026, removed it. The 60-day rule survives intact in every other respect; what has changed is that being tax resident elsewhere is no longer, by itself, a disqualification.

What the 60-day rule asked for, and what it asks for now

The rule applies to an individual who does not meet the ordinary 183-day test. The 183-day rule is unchanged: spend more than 183 days in Cyprus in a calendar year and you are tax resident, with nothing further to prove. The 60-day rule is the alternative for people whose year is genuinely split across several countries.

Note what has not moved. The 183-day ceiling on presence in any one other country is a separate condition and it still applies. A person who spends 200 days a year in a single foreign country cannot use the 60-day rule, whatever their residency status there. The business, employment or directorship link must also be live during the tax year: if it is terminated, the residency claim falls with it for that year.

The treaty now decides the outcome, not the statute

Removing the condition does not mean two countries can both tax the same person without consequence. It means the conflict is resolved where it was always supposed to be resolved – in the applicable double tax treaty. Cyprus has an extensive double tax treaty network, and most of those treaties follow the OECD Model tie-breaker in Article 4(2). That test runs in a fixed order: the state where a permanent home is available; then the state of closer personal and economic relations, the centre of vital interests; then habitual abode; then nationality; and, failing all of those, agreement between the two tax authorities.

This is the practical consequence of the 2026 change, and it is easy to underestimate. Before, a competing residence was a yes-or-no question answered by Cypriot law. Now it is an evidential question answered by a treaty, and the evidence is the ordinary material of a life: where the family home is, where the children are at school, where the bank and investment accounts are held, where the board meets, where the person actually sleeps. A Cyprus tax residency certificate obtained on the 60-day rule is a strong document, but it is not immune to a foreign authority applying the tie-breaker and reaching the opposite conclusion.

Where no treaty exists with the competing state, there is no tie-breaker at all, and genuine double residence is possible. That is a scenario to plan around before the tax year closes, not after.

What Cyprus tax residency is worth in 2026

The same reform reshaped the personal income tax scale. The tax-free threshold rose from €19,500 to €22,000, and the bands above it were widened.

Source: Cyprus Income Tax Law bands in force to 31 December 2025 and as amended with effect from 1 January 2026 by the enacted 2026 tax reform package.

For most internationally mobile clients, however, the income tax scale is not the main attraction. Non-domiciled status is. An individual who is Cyprus tax resident but not Cyprus domiciled remains outside Special Defence Contribution altogether, which means dividend and interest income escape SDC for as long as non-dom status holds – ordinarily until the individual has been Cyprus tax resident for at least 17 out of the preceding 20 years. Where SDC does apply, the rate on actual dividend distributions fell from 17% to 5% for profits of tax years from 2026 onwards.

Relocating employees and executives should also look at the 50% exemption under section 8(23A) of the Income Tax Law: half of employment income is exempt for up to 17 tax years where annual remuneration exceeds €55,000, first employment in Cyprus began on or after 1 January 2022, and the individual was not Cyprus tax resident for at least 15 consecutive tax years beforehand. The 2026 reform left that relief untouched.

Contributions are the offsetting cost. Employees contribute 8.8% to Social Insurance on insurable earnings capped at €68,904 for 2026, and 2.65% to the General Healthcare System on total income capped at €180,000.

A new obligation that arrives with the status

The reform also amended the Assessment and Collection of Taxes Law so that Cyprus tax resident individuals over the age of 25 must file an income tax return. Anyone claiming residency under the 60-day rule should assume filing is mandatory rather than optional, and should treat the return as part of the evidence supporting the claim.

Three practical points follow. Keep contemporaneous proof of the 60 days – boarding passes, entry records and utility usage, not a reconstruction in March. Make sure the permanent home is a real one, taken for the whole tax year rather than a short let arranged near the deadline. And make sure the Cyprus business, employment or directorship is genuine and documented, because that is the condition a foreign authority will probe first.

Who this change actually helps

The clearest beneficiaries are people mid-move: founders who have relocated to Cyprus but remain on a former home country’s register for part of the year, executives serving out a notice period abroad, and Gulf-based entrepreneurs holding a residency certificate in one jurisdiction while building substance in another. It also helps anyone whose previous country of residence applies a long deemed-residence tail, which used to make the old condition impossible to satisfy in the very year the move happened.

What has changed is the entry point, not the standard of proof. Cyprus has made it easier to start; the treaty still decides where you finish. Anyone planning a 2026 claim should fix the position now, while there are still months left in the tax year to build the presence, the home and the corporate link that the rule requires.

How we can help

We advise individuals and their families on Cyprus tax residency planning under both the 183-day and 60-day rules, on non-domiciled status and its interaction with Special Defence Contribution, on double tax treaty tie-breaker analysis where a second jurisdiction also asserts residence, and on the practical work that follows – tax registration, tax residency certificate applications, personal income tax returns, payroll set-up, and the incorporation and administration of the Cyprus company that frequently supplies the required business or directorship link.

This article is for general information only and does not constitute investment, tax, legal or audit advice, and should not be relied upon as such. Rates, thresholds and conditions are stated as at the date of publication and may change. Interested parties should obtain advice on their own circumstances by contacting us at enquiries@cyprusaccountants.com.cy or on +357 22 336 309.

About Us

CYAUSE Audit Services advises internationally mobile individuals on Cyprus tax residency every week – assessing eligibility under the 183-day and 60-day rules, preparing and supporting tax residency certificate applications, registering clients with the Cyprus Tax Department, filing personal income tax returns, advising on non-domiciled status and Special Defence Contribution exposure, and incorporating and administering the Cyprus companies through which many clients establish the business or directorship link the 60-day rule requires. We handle the immigration, payroll and compliance work that follows a relocation as a single engagement rather than as separate mandates.

CYAUSE Audit Services is an Audit & Assurance firm with offices in Cyprus and the UAE. During 2015 we have been awarded by I.C.P.A.C and the A.C.C.A (local and international association of Chartered Certified Accountants) for the Quality of our Audit Services and our Office's Procedures.

Being a Truly International Audit & Assurance firm, we have associates from all over the world and we are constantly looking for new associates to expand our network further. At present, CYAUSE Audit Services operates internationally through its membership with BKR International amongst the largest American associations in the world, Accace Circle, a co-created business community of like-minded BPO providers and advisors who deliver outstanding services with elevated customer experience. Our network covers almost 40 jurisdictions with over 2,000 professionals, it supports more than 10,000 customers, mostly mid-size and international Fortune 500 companies from various sectors, and processes at least 170,000 payslips globally.

CYAUSE Audit Services Ltd is also a member of BKR International one of the biggest US Accounting Associations of the word and the 3E Accounting Network, an international accounting network which originates from Hong Kong and has more than 80 members from all over the world.

Contact Us

If you would like us to assist you with Cyprus tax residency planning, a 60-day rule assessment, non-domiciled status, tax residency certificates or the incorporation and administration of a Cyprus company, please contact us at enquiries@cyprusaccountants.com.cy or call us at +357 22 336 309.

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