Cyprus Tax Guide: 0% on Dividends, 60 Days a Year

Cyprus sits 107th out of 217 in our world ranking, with a FiScore of 5.2 out of 10. A mid-table score, for a country running one of the most useful regimes in the European Union. The explanation is short: the headline rate and the rate people actually pay have almost nothing to do with each other.

The headline numbers

Corporate tax rose from 12.5% to 15% on 1 January 2026, aligning with the global minimum. It is a rise, but 15% remains among the lowest rates in the EU.

The real story: non-dom status

Like Malta, Cyprus separates residence from domicile. Someone who moves to Cyprus is resident but not domiciled: a non-dom.

What that changes is substantial. Cyprus normally levies a Special Defence Contribution, the SDC, of 17% on dividends and interest. A non-dom is exempt from it, on worldwide income.

In plain terms: 0% on dividends and 0% on passive interest, wherever they arise, for 17 years.

One contribution remains, the health system levy known as GESY: 2.65% on dividends, interest and rent, capped at €180,000 of income. The absolute maximum is therefore €4,770 a year. On a million euros of dividends, that is the only deduction.

After 17 years of residence within the last 20, you are deemed domiciled and the exemption ends. It is a clock, not a permanent status.

The 60-day rule, unique in Europe

This is what separates Cyprus from every competitor.

Almost everywhere else, tax residence means 183 days. Cyprus accepts 60, on three cumulative conditions:

• you keep a home in Cyprus, owned or rented;
• you carry on an activity there, employment or a directorship of a Cyprus company;
• you are not tax resident anywhere else.

That last condition was relaxed on 1 January 2026. Two months a year is therefore enough to establish Cypriot tax residence, where Malta, Andorra or Portugal want six.

A warning that matters: Cyprus accepting you at 60 days does not mean your home country releases you. The country you leave has its own test, and it gets a say.

What Cyprus still takes

• The scale on employment income reaches 35%, and applies normally to a Cypriot salary.
• An allowance covers the first slice of income, and a reduced regime applies to high-earning new arrivals.
• No wealth tax, no inheritance tax.

If you are American

Citizenship-based taxation follows you to Cyprus as it follows you anywhere. A 0% Cypriot rate on dividends does not stop the United States taxing them, and because Cyprus takes almost nothing, there is almost no foreign tax credit to offset the US bill.

For an American, Cyprus is a good place to run a company and a poor place to expect a tax saving on passive income, unless renunciation is genuinely on the table. That is a separate decision with its own cost, covered in our guide to leaving properly.

If you are British

The Statutory Residence Test decides whether you have really left, counting days and ties. Cyprus is a common landing spot for British taxpayers, and demand rose sharply after the UK abolished its own non-dom regime in April 2025. Cyprus kept a version of what Britain gave up, with a 17-year clock.

The drawbacks

The island is divided. The north has been occupied since 1974 and the question is unresolved. It is not a daily risk, but it belongs in any honest assessment.

Banking reputation still carries scars from the 2013 crisis and the golden passport programme stopped in 2020. Account opening checks are heavy.

Substance is scrutinised. A Cyprus company managed from London is a UK company to HMRC. Real management, real decisions, on the ground.

Information is exchanged automatically. Your Cypriot account is reported home.

So, who is Cyprus for?

• A founder paying themselves dividends: the best profile in Europe. 0% on dividends, 15% on the company, and 60 days of presence.
• Someone living off dividends and interest: yes, with total deductions capped at €4,770 a year.
• An employee: limited benefit, you pay the scale up to 35%.
• Someone who does not want to spend six months anywhere: Cyprus is the only EU country that legally allows it.

The full table of Cypriot rates is on our Cyprus page, and the comparison tool puts it next to anywhere else.

Sources

Figures verified in August 2026 against the Cyprus Tax Department, PwC Tax Summaries, KPMG and firms established on the island. An error reported to us gets fixed.

This page informs, it does not advise. Before deciding anything, talk to a professional who will look at your situation, as our terms of use set out.