Tax advantages of the Non-Domicile status
The Non-Dom status offers many more tax benefits than most people know.
June 03, 2023 • 2 min read
Cyprus is known to be an attractive tax destination, and has as such experienced in the last years increasingly more companies and high net worth individuals relocating to the country, that search for a higher financial performance in combination with a mediterranean lifestyle.
The legal vehicle to achieve this goal is the concept of the Non-Domicile Tax Residency, which offers significant tax advantages for 17 years to Cyprus foreigners. The main and well-known advantage of the Non-Dom status is that dividends and interest are exempt from Cyprus income tax.
What most people don't know, is that there is a much longer list of advantages granted by the Non-Domicile scheme:
- Profit from the sale of shares or other specific instruments is not taxed as long as these assets don't contain immovable properties within cypriot territory.
- Capital gains on the sale of immovable property outside of Cyprus is not taxed.
- Wealth, inheritance and gifts are not taxed either.
- Income from work exercised in Cyprus by individuals that resided outside of Cyprus before starting the employment is taxed at only half the usual tax rate for a period of 10 years, provided the salary exceeds €100.000 yearly.
- Services delivered outside of Cyprus to a non-Cyprus resident employer for more than 90 days are not taxed.
- Pensions over the threshold of €3420 received due to a former employment outside of Cyprus is taxed at 5%.
- Lump sum payments from life insurances or from approved provident funds are not taxed.
Disclaimer: This article is published for educational and informational purposes only and does not represent legal, financial or investment advice. The reader is responsible for seeking professional counsel.
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