Cyprus Tax Exempt Income 2025

General Principles

• Tax Residency: Cyprus taxes its residents on their worldwide income. Non-residents are only taxed on income from Cyprus sources.  
• Non-Domicile Status: Cyprus has a "non-dom" regime that offers significant tax advantages to individuals who relocate to Cyprus and have not been domiciled in Cyprus for at least 17 of the previous 20 years.

Common Exemptions for Individuals

• Interest Income: Generally, interest income is exempt from income tax, except for interest earned in the course of business.
• Dividends: Dividend income (both domestic and foreign) is generally exempt from income tax.
• Capital Gains from Shares: Gains from the sale of shares are typically tax-exempt.
• Lump Sum Payments: Lump sums received as a retiring gratuity, commutation of pension, or compensation for death or injuries are usually exempt.  
• Profits from Securities: Profits from the sale of securities are generally tax-exempt.
• Specific Expat Exemptions: Cyprus offers some attractive incentives for individuals taking up their first employment in Cyprus:
• 50% Exemption: Individuals with annual remuneration over €55,000 may qualify for a 50% exemption for 17 years.
• 20% Exemption: Alternatively, individuals with lower incomes may qualify for a 20% exemption or €8,550 (whichever is lower) for the first 7 years.  

Important Notes:

• Non-Dom Status is Key: The non-dom regime is crucial for accessing many of these exemptions, especially for individuals with international income streams.  
• Conditions Apply: Exemptions often have specific conditions and limitations, so it's essential to understand the fine print.