by Andrea Christoudia
What is a 'non–dom' certificate?
A ‘non-dom certificate’ is a certificate issued by the Cyprus Tax Department which confirms that an individual is a Cyprus ‘non-domiciled’ (aka ‘non-dom’) person. Cyprus ‘non-doms’ are exempt from the obligation to pay Special Defence Contribution (SDC) on passive income (i.e. interest, dividends and rental income) for a period of 17 years!
Who is a non–dom?
There are two types of domicility:
- Domicile of origin – i.e. the domicile received at birth (usually dependent on the father’s side). In other words, the Cyprus Tax Department will be looking at your place of birth and also your father’s (or mother’s in certain cases) place of birth.
- Domicile of choice – i.e. the country in which your permanent home (and also your father’s, or mother’s) is established.
If you are not domiciled in Cyprus (whether by origin / choice) then you may apply for a ‘non-dom’ certificate (see below).
Irrespective of the above, individuals who have been Cyprus tax residents for at least 17 years out of the last 20 years prior to the tax year in question, will be deemed to be domiciled in Cyprus and cannot apply for a ‘non–dom’ certificate and exemption.
Individuals who have their domicile of origin in Cyprus (as defined above), can apply for non–dom exemption if:
(i) They were non–Cyprus tax residents for a continuous period of at least 20 consecutive years prior to the tax year in question and
(ii) They have acquired and maintained a domicile of choice outside Cyprus
What are the benefits from applying for a 'non–dom' certificate?
Cyprus tax resident individuals with a ‘non–dom’ certificate are exempt from the obligation to pay SDC for a period of 17 years.
Therefore, dividends (taxed at 17% SDC), interest (taxed at 30% SDC) and rental income (taxed at an effective rate of 2.25% SDC) will be tax free in Cyprus!
How can I apply for a 'non–dom' certificate?
An application needs to be submitted to the Cyprus Tax Department.
How can i submit the application?
We would be happy to help you apply for a ‘non-dom certificate’. All you have to do is get in touch!