Cyprus Residency

[Rita Sherry]

Currently an individual is regarded as tax resident if they spend more than 183 days in Cyprus in a tax year. New additional rule with three extra criteria has been added so that an individual will now be resident if they meet with the following:

1. They spend over 60 days per annum in Cyprus

2. They are employed or engaged in business

3. Maintain a permanent residence in Cyprus

This applies if they are not tax resident elsewhere and dont spend 183 days per annum in another country

Source Blevin Franks.

Rita

Parliament has approved this additional test.

[RattyPatty]

Rita is that one of the three criteria or do you have to meet all three to be considered resident. (Apologies for being a bit thick!) . I am assuming the latter otherwise a lot of us will have a problem. Pat

[Lofos-Jan]

See more detail here about he new '60 day rule' which was voted for in July of this year. https://www.pwc.com.cy/en/publications/ ... 4-2017.pdf

It appears that anyone residing anywhere else for more than 183 days will not have the 60 day rule applied to them. Also, the non-domicile rules still apply for either >183 or >60 day rules.

Jeanne

[Rita Sherry]

RattyPatty

I had assumed only one of the three criteria applied but Jeanne has provided a comprehensive explanation of the new rule re residency - Thank you Jeanne. If one is already registered with immigration and the tax authorities under the over 183 day rule I understand nothing changes but anyone who is not so registered will I presume fall under the 60 day rule or one of the other two criteria and will clearly need advice as to their status. That is how I see it anyway but dont pretend to be an expert on the subject.

Rita

[Kili01]

Thanks Rita and Jeanne for helping to shed some light on this new edict. It seems as if anyone who lives here most of the year and already has a Cyprus TN no shouldn't be affected.
But for those to whom the 60 day rule might apply, surely if they already pay UK tax then they shouldn't be affected either... if the double taxation agreement between the UK and CY still applies?
Dee

[Mighty Sprite]

All that a double taxation agreement does is ensure that you don't pay tax twice on the same income. If you have paid UK tax it can be set off against Cyprus tax due and vice versa.

Paying tax in the UK does not mean that you will not be due to pay tax elsewhere, that depends on the tax rules in the other country.

[RattyPatty]

Thank you Jeanne. I am still not sure I understand! However as I have a home in the UK, and pay tax on my income earned there, and a home in Cyprus and no income I shall just carry on as usual!

We come here twice a year for 2 to 3 months at a time, as I am sure many others do. If Cyprus starts taxing us it may backfire on them☺

Pat

[exodus]

Thank you Jeanne. I am still not sure I understand! However as I have a home in the UK, and pay tax on my income earned there, and a home in Cyprus and no income I shall just carry on as usual!

We come here twice a year for 2 to 3 months at a time, as I am sure many others do. If Cyprus starts taxing us it may backfire on them☺

Pat

A friend of ours is in the same position Pat and visited the tax office in Paphos to clarify the situation.
The only difference being he is from Israel and not UK.
He was told that as he has a house here and usually spends over 60 days a visit, he is now required to Register for Tax and be issued with a T.I.C. No. No need to have a yellow slip as he is not a permanent resident and spends over 183 days a year in his home country.
As he has no income here he will pay no tax here, but will have to complete a Cyprus annual tax return.
Amos.

[RattyPatty]

Thank you Exodus. I wonder if the fact that your friend is not an EU citizen makes any difference.
And, of course, neither will I be shortly.

I spend enough time doing our tax returns in the UK I am not going to volunteer to do them here when I have absolutely no income in Cyprus

Pat

[Lofos-Jan]

The PWC document says:

The 60 day rule applies to individuals who in the relevant tax year:

(i) do not reside in any other single state for a period exceeding 183 days in aggregate, and...

So if you reside somewhere else for more than 183 days per year, I cannot see it applying to you.it would appear to affect only those who may live in several different places, none of which exceeds 183 days.

Jeanne