Non-domiciled individuals

Definition of non-domiciled

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In accordance with the provisions of the Wills and Succession Law, there are two kinds of domicile:

• domicile of origin; i.e. the domicile received at birth (generally dependent on the father side), or

• domicile of choice; i.e. domicile acquired by establishing physical presence in a particular place and by demonstrating sufficient intention to make it the place of permanent residence

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Irrespective of their domicile of origin, an individual who remains a tax resident of Cyprus for a period of at least 17 years out of the last 20 years prior to the tax year in question, shall be deemed as domiciled in Cyprus for SDC purposes.

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Tax benefits for non-domiciled individuals

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Non-dom individuals benefit from being exempt from special defense contribution (SDC) on dividends and interest income.

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Extending non-dom status beyond 17 years

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As per the 2026 tax reform an option was introduced for individuals who do not have a Cyprus domicile of origin and who have become (or are about to become) deemed domiciled after 17 years. Such an individual can elect to pay a fixed €250,000 (€50,000 per year) to extend the non-dom SDC exemption for a further five years. Key features:

• Up to two consecutive five-year periods are available - a maximum of ten years of cover.

• The election is made on Form TD 631, by 30 June of the first year of the five-year period, and the period must begin in the year deemed domicile is first acquired.

• The relief covers SDC on dividends, interest and deemed dividend distributions, and extends to certain distributions within the individual's Cyprus company structure.

• The €250,000 is irrevocable and non-refundable, cannot be set off against other taxes, and carries no foreign tax credit.

• It works as a cap, so it is beneficial mainly where the SDC that would otherwise arise over the five years exceeds €250,000 

A one-off transitional window allowed individuals who became deemed domiciled in 2024 or 2025 to apply by 30 June 2026 for the 2026–2030 period.

 

Elsavco advises non-domiciled individuals on the deemed-domicile timeline and on whether the Article 3D election is worthwhile for their situation, and prepares and submits the application.

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