The new tax-related law amendments and bills mainly aim to harmonise and align the Cyprus tax system with relevant EU guidelines while simplifying the Cyprus tax system and hence making it more attractive. Whereas the use of Cyprus companies in international tax structuring is strengthened, the island becomes increasingly attractive as a prime destination choice for persons wishing to invest in Cyprus property (being a main pre-requisite for acquiring the Cyprus permanent residency permit or Citizenship), move to Cyprus permanently along with their families, set up real business substance and move key employees to Cyprus. This is achieved by introducing certain tax exemptions or relaxations on property transactions and income from Cyprus employment and the introduction of the ‘non-dom’ status.

The non-dom status that is being introduced for the first time will also solve many inherent issues that foreign High Net Worth Individuals have when it comes to taxing their worldwide income after they become Cyprus tax residents. Non-doms will be exempted from defence tax which is applicable on Cyprus tax residents on dividends, interest and rental income. This gives scope for ample planning to foreign persons already residing or who plan to reside or work in the island. It will also help tremendously the tax issues in the cases of foreigners who are beneficiaries to Trusts and subsequently become Cyprus tax residents. View magazine article