Cyprus Non-Dom: 0% Dividend Tax in Plain English

Non-dom status is one of the most searched terms in Cyprus tax, and one of the most misunderstood. People assume it is complicated, involves offshore structures, or is only for the very wealthy. None of that is true. Non-dom status in Cyprus is a straightforward tax classification that applies automatically to most people who relocate here from abroad.

What Non-Dom Status Means

Non-dom is short for non-domiciled. In Cyprus, you qualify as non-dom if you were not a Cyprus tax resident for the 10 years immediately before your first year of Cyprus tax residency. If you have never lived in Cyprus before, you qualify from day one. You do not need to apply for it separately. You declare your status on your annual Cyprus tax return.

Non-dom status lasts for up to 17 years of Cyprus tax residency.

What It Exempts You From

Non-dom status exempts you from the Special Defence Contribution (SDC) on dividends and interest. As a non-dom you pay 0% SDC on dividends from any company worldwide and 0% SDC on interest income from savings, bonds, or loans.

You still pay Cyprus income tax at normal rates on employment and other earned income. Non-dom status specifically removes the SDC liability on passive income. It is not a blanket exemption from all taxes.

Does It Apply to Dividends from Any Company?

Yes. The exemption applies to dividends from any company worldwide, not just Cyprus companies. A UK shareholder who moves to Cyprus and keeps their existing UK limited company can receive dividends from that company at 0% SDC. This does not require restructuring or closing the UK company.

The UK company itself still pays UK corporation tax. What changes is the personal-level tax on the dividends when they are extracted. Whether the UK retains any taxing rights on those dividends under the UK-Cyprus double tax treaty depends on your specific situation and is worth confirming with an adviser.