In short
- A non-dom is a Cyprus tax resident whose domicile is abroad. Domicile of origin follows the father's.
- Dividends and interest: 0% defence contribution for a non-dom, 5% and 17% for a domiciled resident.
- The status ends after 17 tax-resident years out of 20. From 2026 it extends twice for €250,000 each.
- GeSY stays: 2.65% on up to €180,000 of income a year, which is €4,770 at most.
In this guide
What non-dom means in Cyprus
Non-dom is short for non-domiciled. Cyprus charges the Special Defence Contribution (SDC), a tax on dividends and interest, on a person who meets two tests at once: tax resident in Cyprus and domiciled in Cyprus. A resident whose domicile is in another country fails the second test, so the contribution does not apply. The rule has stood in the Special Defence Contribution Law since 16 July 2015.
Residence and domicile are two separate questions. Residence is counted in days and tested again every year. Domicile is the country that the law treats as your permanent home, and it rarely changes. For the exemption you need the first and must lack the second.
Our page on non-dom status in Cyprus shows how we register the status for a client. This guide explains the rules behind it: who is domiciled, how the 17 years run, what the status exempts and which forms claim it.
Non-dom requirements in Cyprus: who is domiciled, by origin, by choice or by deemed domicile
The Tax Department applies three tests. The first two come from the Wills and Succession Law, the third from the tax law itself.
| Test | What it means | Result |
|---|---|---|
| Domicile of origin | Acquired at birth. It is the father's domicile on that day, or the mother's for a child born outside marriage or after the father's death | Origin in Cyprus: domiciled. Origin abroad: non-dom |
| Domicile of choice | You settle in a country and intend to live there permanently or indefinitely. Your acts and conduct are the evidence | A choice outside Cyprus can displace a Cyprus origin, on the terms below |
| Deemed domicile | You were tax resident in Cyprus for 17 or more of the 20 years before the tax year | Domiciled, whatever your origin |
A person with a Cyprus domicile of origin is still treated as non-dom in two cases. In the first, the person acquired and keeps a domicile of choice outside Cyprus and was not tax resident in Cyprus for 20 consecutive years or more right before the tax year. In the second, the person lived abroad for more than 20 consecutive years before 16 July 2015.
Place of birth and passport do not settle the question. A founder born abroad to a father domiciled abroad has a foreign domicile of origin, and some years of living in Cyprus do not replace it. A domicile of origin continues until a domicile of choice is acquired.
How the 17 years are counted
The test looks back from each tax year over the 20 years before it and counts the years in which you were tax resident in Cyprus. A founder who becomes resident in 2026 and stays resident every year completes 17 resident years with 2042. From tax year 2043 the law deems that person domiciled, so the exemption covers 2026 to 2042.
A year without Cyprus tax residence is left out of the count. A founder who misses the day test in 2030 completes the 17 years with 2043 and keeps the status one year longer. Once a person is deemed domiciled, that domicile stays until the person has completed 20 years as a non-resident.
The extension from 2026: €250,000 for each five years
From 2026 a person whose domicile of origin is outside Cyprus can keep the exemption after the 17 years. The law calls this the alternative method of imposing the contribution. You pay €250,000 for a period of five years, and the law allows two such periods, which brings the total to 27 years. The application is form T.D.631. Article 3D of the Special Defence Contribution Law and the Tax Department's circular 02/2026 set the terms.
What non-dom status exempts and what stays taxable
The exemption concerns one tax, the SDC. The table sets a non-dom resident beside a domiciled resident in 2026.
| Income | Non-dom resident | Domiciled resident |
|---|---|---|
| Dividends from profits of 2026 and later | 0% SDC | 5% SDC |
| Dividends from profits up to 2025, paid by 31 December 2031 | 0% SDC | 17% SDC |
| Interest | 0% SDC | 17% SDC, or 3% on government bonds and listed corporate bonds |
| GeSY on dividends and interest | 2.65% | 2.65% |
| Salary and business profit | Income tax, 0% to 35% | Income tax, 0% to 35% |
| Gains on the sale of shares | Exempt | Exempt |
| Pension from abroad | 5% above €5,000 a year, or the income tax bands | 5% above €5,000 a year, or the income tax bands |
Dividends and interest carry no income tax for either person, and the exemption covers income from Cyprus and from abroad alike. GeSY, the General Healthcare System, is charged on up to €180,000 of a person's income a year, so the contribution stops at €4,770.
On a dividend of €200,000 paid in 2026 from 2026 profits, a non-dom owner pays €4,770 to GeSY and keeps €195,230. A domiciled owner pays the same €4,770 and €10,000 of SDC, and keeps €185,230.
Everything outside the SDC is taxed as for any resident. A resident declares income from Cyprus and from abroad. Salary and business profit fall under the income tax bands: 0% on the first €22,000 of taxable income a year, then 20%, 25% and 30%, and 35% above €72,000. A gain on real estate in Cyprus bears capital gains tax of 20%. Rent carried SDC up to the 2025 tax year and carries none since, for any resident.
The rest of a resident's taxes: income tax in Cyprus.
We do this for you Cyprus non-dom status 0% SDC on dividends for up to 17 years
Cyprus non-dom rules in 2026: what the tax reform changed
The reform in force from 1 January 2026 kept the exemption and changed the rules around it.
- SDC on dividends for domiciled residents fell from 17% to 5% for profits earned from 2026. Non-dom status now saves 5 points on new profits and 17 points on profits of earlier years.
- SDC on rent was abolished for every resident.
- Deemed dividend distribution ended for profits from 2026. Under that rule the Tax Department treated 70% of a company's profit as paid out two years after the year ended, for the share of owners who are resident and domiciled. Shares held by non-doms were outside it.
- A charge of 10% was introduced on disguised dividends, such as private use of the company's assets. It concerns shareholders who are resident and domiciled.
- The extension by two periods of five years was introduced.
- The 60-day rule of tax residence lost a condition: you no longer have to show that no other country treats you as its tax resident.
Tax residence comes first, in every year
The exemption exists for a tax year in which you are resident in Cyprus. You become resident by staying more than 183 days in the calendar year, or under the 60-day rule, which adds conditions about your home and your work in Cyprus. The guide to Cyprus tax residency sets out both tests and the way days are counted.
In a year without Cyprus residence you are outside the SDC as a non-resident, and Cyprus taxes your income from Cyprus alone. The rules of the country where you are resident then apply to the rest. Count your days each year and keep the travel records, because the Tax Department can ask for them.
How to claim the exemption: forms T.D.38 and T.D.624
- Register in the Tax Registry and receive your tax identification number. File the application in the Tax For All portal, the one channel the Tax Department accepts. A person who relies on the 60-day rule attaches an identity document, a letter that explains the reason, and the title deed or the stamped tenancy agreement of the home.
- Complete form T.D.38, the declaration of an individual for exemption as non-domiciled, with questionnaire T.D.38QA on your domicile of origin. A person who relies on a domicile of choice abroad adds questionnaire T.D.38QB.
- Send the forms to the Tax Department office of your district.
- Give form T.D.624/NP to each payer of dividends or interest in Cyprus, such as your company or your bank. It is your declaration of exemption from the deduction of SDC, so the payer withholds nothing.
- Where a foreign tax office or a bank asks for proof of residence, apply for a tax residency certificate (TRC) on form T.D.126. The fee is €80.
Non-dom status and your own Cyprus company
Most founders use the status together with a company of their own. The company pays 15% corporate tax on its profit and distributes the rest. With €150,000 of taxable profit in 2026 the tax is €22,500 and the dividend is €127,500. A non-dom owner pays €3,378.75 to GeSY and receives €124,121.25. A domiciled owner pays a further €6,375 of SDC.
The company also provides the tie that the 60-day rule asks for, because a director of a Cyprus tax-resident company holds an office in Cyprus. A salary from the company is taxed by the bands and carries social insurance, and a dividend carries neither. The guides on dividends in Cyprus and on how payroll works in Cyprus give the figures for each route.
Company formation in Cyprus starts at €1,699 before VAT, and our tax services in Cyprus include the company's own returns. We prepare and file the forms above for you: registering your non-dom status in Cyprus.
