Non-Domicile (Non-Dom) in Cyprus: The 2025 Complete Guide

Cyprus’s non-dom regime lets new tax residents who are not domiciled in Cyprus receive most passive income without Special Defence Contribution (SDC). Pair that with flexible residency rules and EU access, and you get one of Europe’s most attractive personal tax frameworks. Below is a clear, research-backed guide to eligibility, benefits, limits, and how to claim the status.

What “non-dom” means in Cyprus

In 2015 Cyprus amended its SDC law to introduce a domicile test. You are non-dom if you’re a Cyprus tax resident but you don’t have a Cypriot domicile (under the Wills & Succession Law) and you haven’t been tax-resident in Cyprus for at least 17 of the last 20 years. After you become resident for 17 out of 20 years, you are treated as deemed domiciled and the non-dom benefits cease. 

Becoming a tax resident: you can qualify under either the 183-day rule or the 60-day rule (with extra conditions: no other tax residency, business/employment in Cyprus, and a permanent home in Cyprus).

What income a non-dom does (and doesn’t) pay in Cyprus

SDC (Special Defence Contribution):
SDC normally applies to dividends (17%), passive interest (30%), and rents (effective 2.25% = 3% on 75% of gross rent)—but non-dom residents are exempt from SDC on all three. That is the core benefit.

GHS/GeSY healthcare levy:
Non-doms still pay the GHS contribution (2.65%) on dividends, interest and gross rents, subject to an annual income cap (currently €180,000). Banks often withhold the levy at source.

Personal Income Tax (PIT):

• Employment/self-employment and business interest remain taxed at normal PIT bands.
• Rental income is taxed under PIT after a statutory 20% deduction (plus allowable interest and wear-and-tear/capital allowances), but without SDC if you’re non-dom. 

Capital Gains Tax (CGT):
Cyprus levies CGT only on gains from Cyprus-situated immovable property (and certain property-rich shares). Share disposals not linked to Cyprus real estate are generally outside CGT. Non-dom status does not change the CGT scope. Quick comparison: domiciled vs non-dom (for residents)

Sources: KPMG non-dom summary; MoF guides; PwC tax summaries; GHS financing page.

How long the non-dom relief lasts

You can enjoy the SDC exemption until you have been a Cyprus tax resident for 17 out of the last 20 years. After that, you become deemed domiciled and SDC applies like for any other domiciled resident. Plan ahead, because the 17-year clock matters for long-term dividend or rent strategies.

How to claim non-dom in practice (forms & steps)

Although “domicile” is a legal concept, you formally claim the SDC exemption by filing the T.D.38 declaration (with questionnaires T.D.38Qa/Qb) to your district tax office – the Tax Department provides these forms online. Many banks also ask for the declaration before paying dividends/interest without SDC. Submit the forms in the first year you receivedividends/interest/rent and, in some cases, every 3 years thereafter.

Tip: keep proof of your domicile of origin/choice (e.g., birth certificate, long-term residence abroad, property/utility contracts) and of your recent Cyprus tax residency. This speeds up banking and tax compliance.

Interaction with other popular incentives

• First-employment exemption: new or returning hires may qualify for the 50% income-tax exemption on Cyprus employment income (subject to conditions, e.g., salary thresholds and start dates), for up to 17 years. This stacks independently from non-dom SDC relief, so you can reduce salary tax and SDC on passive income at the same time. Always check the current circular for your start date and salary.
• No wealth or inheritance tax: Cyprus has no net-wealth tax and no inheritance/estate tax, which complements the non-dom regime for long-term planning. (General framework reflected across leading tax summaries.)

Worked example (dividends + rent)

Scenario: A non-dom tax resident receives €100,000 in foreign dividends and €24,000 gross annual rent from a Cyprus apartment.
SDC: €0 on dividends and rent (non-dom).
GHS: 2.65% on (dividends + gross rent) up to €180,000 cap → €3,276.
PIT on rent: 20% statutory deduction → taxable base €19,200, then normal PIT bands apply.

Compliance checklist (save this)

• Confirm you are a tax resident (183-day or 60-day rule).
• Check you are not domiciled in Cyprus and haven’t been resident 17/20 years.
• File T.D.38 + T.D.38Qa/Qb to claim SDC exemption; provide to banks if requested.
• Remember GHS 2.65% still applies to dividends/interest/rent (cap €180k).
• For rent, apply the 20% deduction and allowable expenses for PIT.
• Track CGT only on Cyprus real estate–linked gains.

FAQs

Do I pay any tax on bank interest as a non-dom?
Usually no SDC on passive interest; however, GHS 2.65% still applies, and if interest is part of a business activity, it may be taxed under PIT. 

I’m on the 60-day rule. Can I be non-dom?
Yes—residency and domicile are separate. If you meet the 60-day test and aren’t domiciled in Cyprus, you can claim the SDC exemption.

Is there a hard age or asset limit?
No. The key limit is time: after 17/20 years of Cyprus tax residency you become deemed domiciled.

Bottom line

Cyprus’s non-dom rules can cut tax dramatically on dividends, interest, and rental SDC, while GHS and PIT still apply in specific ways. Because details matter—days of presence, documents, and bank procedures – map your plan before you move assets or change residency.

For step-by-step checklists, form guidance, and curated professional help, visit Soneverse and explore our Law Guide, built to help individuals and families navigate Cyprus residency and tax with confidence.