Relocating to Cyprus

Cyprus is one of the most attractive destinations in Europe for individuals and retirees relocating from abroad, combining a mild lifestyle with a favourable, EU-compliant tax system. This page summarises how Cyprus taxes new residents and pensioners under the rules in force from 2026. Elsavco advises individuals on every step of relocating, from establishing tax residency to registering with the authorities and filing returns.

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Becoming a Cyprus tax resident

You can become a Cyprus tax resident in one of two ways:

• The 183-day rule: you spend more than 183 days in Cyprus in a tax year.

• The 60-day rule: you spend at least 60 days in Cyprus and, in the same year, you do not spend more than 183 days in any other single country, and you maintain a permanent home in Cyprus together with a Cyprus tie (business, employment or an office).

 

Non-domiciled status

Individuals who become Cyprus tax resident but are not domiciled in Cyprus qualify as "non-domiciled". A non-dom is exempt from Special Defence Contribution (SDC) on dividends and interest, a significant benefit for those with investment income, until they become deemed domiciled (broadly, Cyprus tax resident for 17 of the last 20 years). From 2026, individuals without a Cyprus domicile of origin can then elect to extend the SDC exemption by paying a fixed €250,000 for a further five years (see our Non-domiciled status page).

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Taxation of foreign pensions

A Cyprus tax resident receiving a pension from abroad can choose, each year, between:

• a flat 5% tax on the pension income above €5,000 per year (the first €5,000 is tax-free); or

• taxation under the normal income tax bands,

whichever produces the lower tax. This makes Cyprus especially efficient for retirees with overseas pensions.

 

Personal income tax

Other income is taxed under the normal bands, with the first €22,000 taxed at 0% and rates of 20% to 35% above that (see our Personal Income Tax page for the full bands and the exemptions available to new arrivals, including the 50% exemption for higher-earning first-time employees).

 

Other points for new residents

• Rental income is subject to income tax only (SDC on rents was abolished from 2026); GHS may apply.

• Cyprus has an extensive double-tax-treaty network, helping avoid double taxation on foreign income and pensions.

• There is no inheritance tax, no wealth tax, and no immovable property tax in Cyprus.

 

How Elsavco helps

• Establish and evidence your Cyprus tax residency (183-day or 60-day rule) and register you with the tax authorities.

• Apply non-domiciled status and advise on the €250,000 SDC extension where relevant.

• Advise on the 5% flat-tax election for foreign pensions and your overall personal tax position.

• Prepare and file your annual tax returns and handle ongoing compliance.

 

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