Cyprus Non-Domain Status: 0% on dividends and interest, for 17 years

What exactly is the non-dom status?

The non-dom status in Cyprus is a tax regime under which foreigners who become tax residents of Cyprus pay no tax (0%) on their worldwide dividends and interest income for up to 17 years.

This is possible because, through this status, they are legally exempted from the so-called Special Defence Contribution (SDC).

SDC is a separate levy on passive income. For the local population (Cypriots), since 2026, this amounts to 5% on dividends from profits from 2026 onwards, and 17% on profits from before 2026. As a non-resident, you pay zero, regardless of whether the dividend comes from a Cypriot or a foreign company.

Non-dom is therefore neither an independent residence status nor a general tax exemption. It is one specific exemption per capita.

What is and isn't exempt?

This is where most misunderstandings lie, even on sites that should know better.

Three points that often go wrong:

1. Crypto is not exempt. Since January 1, 2026, Article 20E applies: an 8% flat rate on every disposal (sale, swap, payment, gift), regardless of the holding period and regardless of your non-dom status. However, the flow to private ownership remains tax-free: your company pays 8%, and the dividend to you is 0%. Read more about crypto tax. Typical “Hodlers” can still opt for 0%.
2. The profit on shares and securities is 0%, but not thanks to non-dom. That exemption applies to every Cypriot taxpayer. The same applies to the absence of inheritance and wealth tax.
3. Rental income is no longer a non-resident benefit. The SDC on rent has been abolished for everyone as of 2026, so on this point you are on equal footing with a domiciled resident. More about rental income tax.

Who is eligible for Non-Domiciled status in Cyprus?

Anyone with a domicile of origin outside Cyprus who becomes a tax resident, and who has not been a resident for 17 years or longer during the past 20 years.

Specifically, two conditions:

1. No Cypriot domicile of origin. Your domicile of origin is derived from your father's domicile at the time of your birth, not from your place of birth. For virtually every foreigner moving to Cyprus, this is automatically resolved.
2. Being a tax resident of Cyprus. Via the 183-day rule or the 60-day rule. Since 2026, you may also be a tax resident elsewhere for the latter route; that condition has been removed.

Please note: if you acquire a domicile of choice in Cyprus by moving there with the clear intention of staying permanently, the exemption lapses, regardless of how many years you still had remaining.

How do you apply for Non-Dom?

You apply for Non-dom status at your district office using form TD38, supplemented by questionnaire TD38QA. This does not happen automatically. Applying for a tax number and becoming a tax resident are separate processes; without a submitted declaration, you are simply treated as domiciled and pay SDC.

The practical order: residence document, tax identification number (TIC), tax residency, and then the non-dom declaration in the first year in which you receive passive income. If you submit TD38 without TD38QA, the tax authorities will still request that questionnaire.

What does your dividend really cost?

Only 2.65% GeSY, and that amount does not increase indefinitely.

The GeSY basis is capped at €180,000 in total annual income, so your maximum contribution is €4,770 per year. As a result, you pay less than 1% on €500,000 in dividends. That cap applies to all your income combined, so GeSY on your salary counts towards the ceiling.

Do you want to know what Non-Dom in Cyprus offers you?

We assess your situation, submit your TD38 correctly, and calculate your entire structure, from corporate profit to what ends up in private hands.

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Non-domiciled versus domiciled: the difference on €500,000

A Cypriot company makes a profit of €500,000 in 2026 and distributes the entire remainder.

• Corporate income tax (15%): €75,000. Remaining: €425,000.
• As non-dom: 0% SDC, only €4,770 GeSY. Total pressure: approximately 16%.
• As domiciled: 5% SDC on €425,000 is €21,250, plus GeSY. Total tax burden: approximately 20%.

At this level, the difference in status is well over €21,000 per year. Before the reform, the difference was much larger (SDC stood at 17%), so the gap has narrowed. Non-domiciled status remains valuable, but the reduction to 5% makes Cyprus significantly more attractive to domiciled residents than before, as well.

By way of comparison with home: on that same dividend, you pay 30% withholding tax in Belgium, 24.5% to 31% in Box 2 in the Netherlands, and approximately 26.4% in Germany. As a non-dom in Cyprus, you pay €4,770. That is not a percentage difference, but an order of magnitude.

What happens after 17 years?

You are deemed to be domiciled, unless you opt for the paid extension. As soon as you were a tax resident of Cyprus in 17 of the preceding 20 tax years, you revert to deemed domicile and pay SDC like any domiciled resident.

The 2026 reform introduced a loophole for the first time. Anyone with a domicile of origin outside Cyprus can extend the exemption for two consecutive five-year periods, for a fixed amount of €250,000 per period. This extends the regime to a maximum of 27 years. Circular 2/2026 explains the mechanism: the first year in which SDC would otherwise apply is also the only year in which your first five-year period can commence, and payment must be received before 30 June of that year.

Two conditions: the choice is irrevocable and the tax authorities will under no circumstances issue a refund, and anyone of Cypriot origin is not eligible.

For someone moving now, this seems far away. But if you are building a long-term structure, it is good to know that since 2026 an extension exists where there wasn't one before.

Regulatory basis

The non-domicile exemption is regulated in the Special Contribution for Defence Law, which incorporates the deemed-domicile rule of 17 out of 20 years. The reduction of the SDC on dividends to 5%, the abolition of SDC on rental income, and the extension scheme of €250,000 per five-year period follow from the reform package that entered into force on 1 January 2026; the implementation is explained in Circular 2/2026 from the Tax Department. Crypto falls under Article 20E of the Income Tax Law. Tax reviewed by a local Cypriot tax expert.

Ready to set up your structure in Cyprus?

Non-dom is powerful, but only if the foundation is sound: tax residency, a correctly filed TD38, and a company in Cyprus with real substance. That is exactly what we arrange from A to Z.

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