Cy Non Dom

---
name: cy-non-dom
description: "Cyprus non-domicile (non-dom) status for individuals, tax year 2026, under the Special Defence Contribution (SDC) Law 117(I)/2002 as amended by Law 245(I)/2025 from 1 January 2026 and the Income Tax Law 118(I)/2002. Covers the 183-day and 60-day residence rules, domicile of origin and its two exceptions, deemed domicile after 17 of the last 20 years and how long it lasts, the SDC exemption on dividends and interest, the 5%, 17% and 3% SDC rates a domiciled resident pays instead, the new Article 3D option to keep non-dom treatment for EUR 250,000 per five years (two periods at most), GHS (GESY) at 2.65% on dividends and interest, which non-dom status does not remove, forms, deadlines and penalties. Trigger on: Cyprus non-dom, deemed domicile 17 of 20 years, SDC exemption, Cyprus lump sum non-dom, TD 631, T.D.38. Out of scope: cyprus-income-tax, cy-cross-border, cyprus-social-contributions, cy-corporate-tax, cyprus-tax-optimization."
license: "AGPL-3.0-or-later (code) / OpenAccountants Guide License v1.0 (content)"
metadata:
  source: openaccountants
  openaccountants_url: "https://www.openaccountants.com/skills/cy-non-dom"
  jurisdiction: "CY"
  tax_year: "2026"
  last_updated: "2026-10-27"
---

# Cyprus non-domicile status and Special Defence Contribution (tax year 2026)

Non-dom status in Cyprus is about one tax: the Special Defence Contribution (SDC) on dividends and interest. It does not change income tax and it does not change the General Healthcare System (GHS, GESY) contribution. Cyprus taxes on the calendar year. The 2026 reform (Law 245(I)/2025, in force 1 January 2026) cut the SDC rate on dividends for individuals, abolished SDC on rent, ended the deemed dividend distribution for 2026 profits onward and added Article 3D, a fixed-sum option for long-stay residents. Article numbers are to the Greek consolidated SDC Law on CyLaw. Income tax is in `cyprus-income-tax`; residence detail for leavers and non-residents in `cy-cross-border`; GHS rates in `cyprus-social-contributions`.

## Who this applies to

SDC on dividends and interest is charged on an individual who is "κάτοικος στη Δημοκρατία" (SDC Law arts. 3(1)(α), 3B(α)(i)). For SDC that means tax resident under the Income Tax Law AND domiciled in Cyprus (SDC Law art. 2(3); Tax Department residency page). So there are two tests, run for each tax year.

**Test 1: tax residence (Income Tax Law art. 2).** A person is resident under either rule:

- **183-day rule.** In Cyprus for one or more periods exceeding 183 days in total in the tax year.
- **60-day rule.** All four in the same year: at least 60 days in Cyprus; not more than 183 days in any other single state; carries on a business in Cyprus, or is employed in Cyprus, or holds an office in a Cyprus tax resident person, at any time in the year, and that did not end during the year; keeps a permanent home in Cyprus, owned or rented. From 2026 the person may also be tax resident elsewhere; the old condition that they were not resident in another state is gone (consistent with `cyprus-income-tax`).
- **Day counting.** The day of arrival counts as a day in Cyprus; the day of departure as a day outside. Arrival and departure on the same day count as in Cyprus; departure and return on the same day count as outside (Tax Department residency page).

A non-resident pays no SDC on dividends or interest at all. Stop there.

**Test 2: domicile (SDC Law art. 2(3)).** A person is domiciled in Cyprus if they have a Cypriot domicile of origin under the Wills and Succession Law, except:

- (i) a person who has acquired and keeps a domicile of choice outside Cyprus, provided they were not Cyprus resident for any period of at least 20 consecutive years before the tax year; or
- (ii) a person who was not Cyprus resident for at least 20 consecutive years immediately before "the commencement of this Law" (art. 2(3)(ii); the domicile rules were added by Law 119(I)/2015, and the Tax Department page dates the test to 16 July 2015).

**Deemed domicile, the 17-year limit (art. 2(3), proviso (i)).** Whatever the domicile of origin, a person who was Cyprus tax resident for at least 17 of the last 20 years before the tax year is deemed domiciled. The years need not be consecutive. The tested year itself is not counted. In practice, a foreigner can be a non-dom resident for 17 years; from the 18th resident year SDC applies unless Article 3D is elected.

**How long deemed domicile lasts (proviso (ii)).** Once deemed domiciled, the person keeps it until they complete 20 years in which they are not Cyprus resident. The Tax Department's 2026 presentation says those 20 years need not be consecutive.

The domicile of origin is normally acquired at birth and, as a general rule, is the father's domicile at the child's birth (Tax Department residency page).

## Rates, bands and thresholds

| Item | Rate or amount | Year | Source |
|---|---|---|---|
| SDC on dividends, resident and domiciled individual | 5% | 2026 | https://www.cylaw.org/nomoi/enop/non-ind/2002_1_117/full.html (art. 3(1)(α)) |
| SDC on dividends from a Cyprus-resident company out of profits of 2025 and earlier, received within 6 years of 1 January 2026 | 17% | 2026 to 2031 | https://www.cylaw.org/nomoi/enop/non-ind/2002_1_117/full.html (art. 3(1)(α), proviso (ii)) |
| SDC on interest, resident and domiciled individual | 17% | 2026 | https://www.cylaw.org/nomoi/enop/non-ind/2002_1_117/full.html (art. 3B(α)(i)) |
| SDC on interest from Cyprus or EU government savings certificates and development bonds, and listed corporate and public bonds | 3% | 2026 | https://www.cylaw.org/nomoi/enop/non-ind/2002_1_117/full.html (art. 3B(β)(i)) |
| Refund of SDC on interest above 3% where total yearly income incl. interest is not more than | EUR 12,000 | 2026 | https://www.cylaw.org/nomoi/enop/non-ind/2002_1_117/full.html (art. 3B(α)(i), second proviso) |
| SDC on interest or dividends, non-domiciled or non-resident individual | Nil | 2026 | https://www.cylaw.org/nomoi/enop/non-ind/2002_1_117/full.html (arts. 2(3), 3, 3B) |
| SDC on rent | Abolished from 1 January 2026 | 2026 | https://www.cylaw.org/nomoi/arith/2025_1_245.pdf |
| Deemed domicile | At least 17 of the last 20 years resident | 2026 | https://www.cylaw.org/nomoi/enop/non-ind/2002_1_117/full.html (art. 2(3)) |
| Deemed domicile ends after | 20 non-resident years | 2026 | https://www.cylaw.org/nomoi/enop/non-ind/2002_1_117/full.html (art. 2(3)) |
| Article 3D fixed SDC, annual equivalent | EUR 50,000 a year, whatever the income | 2026 | https://www.cylaw.org/nomoi/enop/non-ind/2002_1_117/full.html (art. 3D(1)) |
| Article 3D payment per five-year period, one instalment | EUR 250,000 | 2026 | https://www.cylaw.org/nomoi/enop/non-ind/2002_1_117/full.html (art. 3D(4)) |
| Article 3D periods allowed | 2 five-year periods at most | 2026 | https://www.cylaw.org/nomoi/enop/non-ind/2002_1_117/full.html (art. 3D(9)) |
| GHS on dividends, interest and rent of a Cyprus tax resident (domiciled or not) | 2.65% | 2026 | https://www.gesy.org.cy/en-us/hiofinancing |
| GHS annual income ceiling, all income combined | EUR 180,000 | 2026 | https://www.gesy.org.cy/en-us/hiofinancing |
| Income tax on dividends and interest of an individual | Exempt | 2026 | https://www.cylaw.org/nomoi/enop/non-ind/2002_1_118/full.html (art. 8(19), 8(20)) |
| SDC late payment surcharge | 5%, plus 5% more if unpaid 2 months after the due date | 2026 | https://www.cylaw.org/nomoi/enop/non-ind/2002_1_117/full.html (art. 7B(ε)) |
| Public default interest rate | 3.50% | 2026 | https://www.cylaw.org/KDP/data/2025_1_376.pdf |

## The taxable base

**What non-dom status removes.** SDC on dividends and on interest (received or credited). Nothing else. Rent left SDC for everyone from 2026, so non-dom status no longer matters for rent.

**What stays the same for a non-dom resident.**

- **Income tax.** Dividends and interest of an individual are exempt from income tax (ITL art. 8(19) and 8(20)) for everyone, so domicile changes nothing here. Salary, business profit, rent and pensions are taxed at the 2026 bands (0% to EUR 22,000, then 20%, 25%, 30% and 35% above EUR 72,000) whatever the domicile. The 20%, 25% and 50% first-employment exemptions also ignore domicile. Full rules: `cyprus-income-tax`.
- **GHS.** GHS turns on tax residence, not domicile. A Cyprus tax resident pays 2.65% on dividends, interest and rent, with all income counted together up to EUR 180,000 a year. A non-resident pays GHS only on Cyprus income, earnings and pensions, and none on dividends and interest (HIO financing page). So a resident non-dom who pays no SDC still pays GHS on the same dividends and interest. Rates and withholding: `cyprus-social-contributions`.
- **Capital gains tax.** CGT at 20% applies to Cyprus immovable property and shares in companies that hold it, whatever the seller's residence or domicile. From 2026, shares in a company holding Cyprus property indirectly are caught if at least 20% (was 50%) of their market value comes from that property; directly held property makes the shares caught whatever the percentage; a treaty giving Cyprus the right only at 50% prevails. Individuals have a EUR 30,000 lifetime general exemption for disposals from 1 January 2026; it is for natural persons only and counts the gains on all their disposals together, whatever the year, so an unused balance carries to a later disposal (CGT Law 52/1980 art. 5(1)). Listed shares on a regulated market stay exempt (art. 5(3)); on a non-regulated market, exempt only while the total value of the year's disposals does not exceed EUR 50,000. Once that total passes EUR 50,000, CGT is charged on the gain of each disposal made in the year, on the date the total passed EUR 50,000. Shares held at 31 December 2025 that were then listed on a non-regulated market stay exempt whatever the total (art. 5(3A) and provisos; Tax Department SDC and CGT presentation, 6 March 2026, and CGT page, read 24 October 2026). Indexation and the other exemptions are outside this skill.

**What a domiciled resident pays.** Dividends at 5%, or 17% on a dividend from a Cyprus-resident company paid out of 2025-or-earlier profits and received by 31 December 2031. A dividend already deemed distributed (art. 3C or old art. 3(3)), or paid out of dividends that already bore SDC, is taken out of the base (art. 3(1)(α), proviso (i)). Interest at 17%, or 3% on the listed and public bonds above. Interest on compensation for disability, serious bodily harm or death is exempt (art. 3B(α)(i)). SDC is not deductible for income tax (art. 5).

**Article 3D, the fixed-sum option.** Who: a person whose domicile of origin is NOT Cyprus and who is deemed domiciled under the 17-of-20 rule (art. 3D(1)). A person with a Cypriot domicile of origin cannot use it. The election:

- covers 5 consecutive tax years and is irrevocable and binding (art. 3D(2));
- needs an application on the set form, approved by the Commissioner, filed by 30 June of the first year of the period (art. 3D(3));
- is paid in one sum of EUR 250,000 by the end of the month after the month of approval (art. 3D(4)). If it is not paid on time, Article 3D applies for none of the five years, and the person pays SDC on actual income under arts. 3 to 3C (art. 3D(4), proviso);
- cannot be set off against other tax or credit balances (art. 3D(5)), settles all SDC for the five years (art. 3D(6)), is never refunded (art. 3D(7)) and gets no foreign tax credit (art. 3D(8));
- can be used for 2 periods at most (art. 3D(9)). After 17 resident years plus 10 covered years, SDC applies on actual income.

The fixed sum does not cover GHS or income tax.

**Anti-abuse.** If a domiciled person transfers assets to a non-domiciled spouse or relative (up to the third degree, including the spouse's relatives) and the Commissioner finds that avoiding SDC was a main purpose, the income from those assets bears SDC, collected from either person (art. 4A). A general anti-abuse rule ignores non-genuine arrangements made mainly for an SDC advantage (art. 4B).

## Deadlines and filing

| What | When | Source |
|---|---|---|
| SDC withheld by a Cyprus payer of dividends or interest | Paid to the Commissioner by the end of the month after the month of withholding (art. 4(1A)) | SDC Law art. 4 |
| SDC on dividends or interest from outside Cyprus (domiciled resident) | By the income tax return deadline for the year under ACL art. 5; for 2026, 31 July 2027 per the Tax Department FAQs. Foreign tax is credited under ITL arts. 34 to 36 (art. 4(4)) | SDC Law art. 4(4); FAQs 11 May 2026 |
| Non-dom claim to the payer | Apply for exemption on Form T.D.38; related forms T.D.624/NP (declaration for exemption from SDC deduction), T.D038QA (domicile of origin questionnaire), T.D038QB (domicile of choice questionnaire) | Tax Department residency page |
| Article 3D application | Form TD 631 through the Tax For All (TFA) portal, by 30 June of the first year of the five-year period; may be filed up to 2 years before the year the person becomes deemed domiciled. Attach T.D.38Qa, clean criminal record certificates from Cyprus and every country of citizenship, and a Tax Department certificate that the person is not domiciled | SDC Law art. 3D(3); Form TD 631 |
| Article 3D payment | EUR 250,000 by the end of the month after the month of approval | SDC Law art. 3D(4) |
| GHS on dividends and interest | Withheld by the Cyprus payer; otherwise self-assessed (see `cyprus-social-contributions`) | HIO; `cyprus-social-contributions` |

## Penalties and interest

- **Late SDC payment:** a 5% charge on the SDC due, and another 5% if still unpaid 2 months after the due date (art. 7B(ε)).
- **Interest:** SDC not withheld, or withheld and not paid on time, carries interest at the public default rate from the due date (art. 4(3)); 3.50% for 2026 (K.D.P. 376/2025).
- **Missed notice, return or duty with a set deadline:** EUR 500 for an individual (art. 7B(α)).
- **Payer who fails to withhold:** the SDC is treated as charged on the payer, and the Commissioner may also collect from the person who received the income (art. 4(2)).
- **Offences:** failing to pay SDC is a criminal offence; on conviction, the unpaid sum plus up to twice that amount (art. 6(2)); other breaches up to EUR 1,000 each (art. 6(3)). Prosecution needs the Attorney General's consent (art. 7).
- **Article 3D unpaid:** no penalty under 3D itself, but the election falls for all five years and SDC is charged on actual income (art. 3D(4), proviso), with the late-payment rules above on that SDC.

## Cross-border points

- **Arrivals.** A foreigner arriving in Cyprus is non-dom from day one and stays so until the 17-of-20 test bites. Check the residence rule each year. The 60-day rule now works even if the person is also resident elsewhere, so treaty tie-breakers matter more; this skill applies Cyprus domestic rules only.
- **Returning Cypriots.** A person with a Cypriot domicile of origin is non-dom only under exception (i) or (ii). Both need 20 consecutive non-resident years. Article 3D is not open to them.
- **Leavers.** A non-resident pays no SDC on dividends or interest whatever the domicile. A deemed-domiciled person who leaves and comes back inside 20 non-resident years is domiciled again on return.
- **Non-residents and dividends.** A non-resident who receives a dividend from profits that bore deemed distribution SDC may claim back that SDC for the shares held at 31 December 2025, where the deemed distribution was under the old art. 3(3) in force before 2026 (art. 3C(7), proviso). See `cy-cross-border` for withholding on payments abroad.
- **Foreign-source income.** For a domiciled resident, SDC on foreign dividends and interest is self-assessed, with credit for foreign tax (art. 4(4)). Under Article 3D, no foreign tax credit (art. 3D(8)).

## Worked examples

**Example 1: Anna, a non-dom resident in her fifth year.** Anna is Swedish, has lived in Cyprus under the 183-day rule since 2022 and has no Cypriot domicile of origin. In 2026 she earns a salary of EUR 60,000, Cyprus dividends of EUR 40,000 from 2026 profits and bank interest of EUR 10,000. She was resident for only 4 of the last 20 years, so she is not deemed domiciled. SDC is nil. Income tax does not touch the dividends and interest (ITL art. 8(19), 8(20)). GHS at 2.65% is due on the dividends and interest because she is tax resident; her total income of EUR 110,000 is under the EUR 180,000 ceiling, so the whole amount bears GHS. For comparison, a domiciled resident would pay SDC of EUR 3,700 on the same income.

```oa-check
name: Anna, non-dom resident, dividends 40,000 and interest 10,000 (2026)
inputs:
  salary: 60000
  dividends: 40000
  interest: 10000
  ghs_rate: 0.0265
  ghs_ceiling: 180000
steps:
  - total_income: salary + dividends + interest
  - sdc_non_dom: 0
  - investment_ghs_base: min(dividends + interest, max(0, ghs_ceiling - salary))
  - ghs_on_investment: investment_ghs_base * ghs_rate
  - sdc_if_domiciled: dividends * 0.05 + interest * 0.17
expected:
  total_income: 110000
  sdc_non_dom: 0
  investment_ghs_base: 50000
  ghs_on_investment: 1325
  sdc_if_domiciled: 3700
```

**Example 2: Marco, deemed domiciled, weighing Article 3D.** Marco is Italian with an Italian domicile of origin. He has been Cyprus resident every year since 2009, so 2026 is tested against 2006 to 2025: 17 resident years (2009 to 2025). He is deemed domiciled from 2026. He expects dividends of EUR 1,200,000 a year from his Cyprus holding company's 2026-onward profits and interest of EUR 50,000 a year, with no other income. On actual income, SDC is EUR 68,500 a year, EUR 342,500 over five years. Article 3D costs EUR 250,000 for the five years if he applies by 30 June 2026 and pays by the end of the month after approval. The fixed sum saves EUR 92,500 on these figures, but it is irrevocable and never refunded, so if the dividends fall the saving can disappear. The break-even is EUR 50,000 of SDC a year. GHS is not covered by Article 3D: his income is above the EUR 180,000 ceiling, so GHS stops at EUR 4,770 a year.

```oa-check
name: Marco, deemed domiciled 17 of 20, Article 3D against actual SDC (2026)
inputs:
  resident_years_in_last_20: 17
  dividends: 1200000
  interest: 50000
  lump_sum: 250000
  years: 5
  ghs_rate: 0.0265
  ghs_ceiling: 180000
steps:
  - deemed_domiciled: min(1, max(0, resident_years_in_last_20 - 16))
  - sdc_per_year: (dividends * 0.05 + interest * 0.17) * deemed_domiciled
  - sdc_five_years: sdc_per_year * years
  - saving_with_3d: sdc_five_years - lump_sum
  - break_even_per_year: lump_sum / years
  - ghs_per_year: min(dividends + interest, ghs_ceiling) * ghs_rate
expected:
  deemed_domiciled: 1
  sdc_per_year: 68500
  sdc_five_years: 342500
  saving_with_3d: 92500
  break_even_per_year: 50000
  ghs_per_year: 4770
```

## Ask the client first

- Where were you born, and what was your father's domicile at your birth? Is your domicile of origin Cypriot? (Decides whether the exceptions or Article 3D are in play.)
- For each of the last 20 tax years, were you Cyprus tax resident under the 183-day or the 60-day rule? (Decides deemed domicile.)
- This year: days in Cyprus, days in any other single country, any Cyprus work, business or office, and a home in Cyprus you own or rent?
- What dividends do you receive, from which companies and out of which profit years, and what interest, from what instruments? (Decides the 5%, 17% or 3% rate and the Article 3D comparison.)
- Have you filed Form T.D.38 or received a Tax Department certificate that you are not domiciled?
- What is your total yearly income from all sources? (Decides the GHS ceiling.)

## Sources

| Source | URL | Read on |
|---|---|---|
| Special Defence Contribution Law 117(I)/2002, consolidated (CyLaw): arts. 2(3), 3, 3A, 3B, 3C, 3D, 4, 4A, 4B, 5, 6, 7, 7B | https://www.cylaw.org/nomoi/enop/non-ind/2002_1_117/full.html | 2026-10-26 |
| SDC (Amendment) (No. 4) Law 245(I)/2025, commencement 1 January 2026 | https://www.cylaw.org/nomoi/arith/2025_1_245.pdf | 2026-10-24 |
| Income Tax Law 118(I)/2002, consolidated (CyLaw): arts. 2, 8(19), 8(20) | https://www.cylaw.org/nomoi/enop/non-ind/2002_1_118/full.html | 2026-10-26 |
| Public Default Interest Rate for 2026 Order, K.D.P. 376/2025 | https://www.cylaw.org/KDP/data/2025_1_376.pdf | 2026-10-24 |
| Health Insurance Organisation, GHS financing (2.65%, EUR 180,000, non-resident rule) | https://www.gesy.org.cy/en-us/hiofinancing | 2026-10-26 |
| Tax Department, Tax Residency/Domicility (day counting, domicile of origin, forms) | https://www.gov.cy/mof-tax/en/documents/tax-residency-domicility/ | 2026-10-24 |
| Tax Department, Form TD 631, Article 3D application | https://www.gov.cy/media/sites/167/2026/06/Application-Extension-of-Non-Dom.pdf | 2026-10-24 |
| Tax Department, presentation on the 2026 SDC and CGT amendments (6 March 2026, Greek) | https://www.gov.cy/media/sites/167/2026/03/EEA-%CE%A6%CE%9A%CE%9A-%CE%9C%CE%95%CE%A4%CE%91%CE%A1%CE%A1%CE%A5%CE%98%CE%9C%CE%99%CE%A3%CE%97-06032026.pdf | 2026-10-24 |
| Capital Gains Tax Law 52/1980, consolidated (CyLaw): art. 5(1), (3), (3A) | https://www.cylaw.org/nomoi/enop/non-ind/1980_1_52/full.html | 2026-10-27 |
| Tax Department, Capital Gains Tax page (20% rate, EUR 30,000 lifetime exemption) | https://www.gov.cy/mof-tax/documents/kefalaioychika-kerdi/ | 2026-10-24 |
| Tax Department, FAQs on the 2026 reform for individuals (11 May 2026; 2026 return due 31 July 2027) | https://www.gov.cy/media/sites/167/2026/05/FAQs-110526.pdf | 2026-10-24 |

Not yet confirmed: the Tax Department pages on gov.cy (residency page, Form TD 631, the 2026 presentation, the CGT page) blocked automated reads on 26 October 2026, so their figures and form names are carried from the 24 October 2026 read and not re-read; whether a foreigner can form a domicile of choice in Cyprus before 17 years (the law and the page are silent); whether the 17% transitional rate reaches dividends from foreign companies out of pre-2026 profits (art. 3(1)(α) proviso (ii) names Cyprus-resident companies only); CGT indexation and the agricultural-land and main-residence exemptions; the 2026 income tax bands and the 20%, 25% and 50% first-employment exemptions from v1.0 are now only in `cyprus-income-tax` (not re-read here); Circular 02/2026 on Article 3D (named in v1.0, not re-read); the Tax Department presentation's statement (v1.0) that a person who applies late for Article 3D, or pays late, pays SDC on actual income for that year and may apply again the next year (the SDC Law says only that a missed payment means Article 3D applies for none of the five years; whether a fresh application can then start a new period the next year is not stated in art. 3D).

## Today's figures and who stands behind this skill

This file is an AI skill (tax rules your AI follows) from OpenAccountants, copied on 2026-10-27. Rates, thresholds and deadlines change. For the current version of this skill, its official sources and the named accountant (if any) who stands behind it, call `get_skill` with slug `cy-non-dom` on the OpenAccountants connector (https://www.openaccountants.com/connect), or read https://www.openaccountants.com/skills/cy-non-dom. If neither is available, confirm every figure against the official source pages cited above before relying on it.