Cyprus 250000 lump sum tax: the door at the end of non-dom
What happens in year 17, and the arithmetic that decides whether to pay.
Last verified 2026-10-22Next review 2027-01-222 official sources
Whether Cyprus works for you depends on how you earnTalk it through
Cyprus 250000 lump sum tax is what you can choose to pay when non-dom status runs out. After 17 of 20 years as a Cyprus tax resident you are deemed domiciled, and from 2026 there is an alternative to simply starting to pay the defence contribution.
Cyprus 250000 lump sum tax: what the election is
A flat Special Defence Contribution of EUR 50,000 a year, paid as one EUR 250,000 payment covering a five-year period, regardless of how much income you have. It is available to a person without a Cyprus domicile of origin who has become deemed domiciled under the 17-of-20 rule, and it can be used for up to two periods, so ten years in all.
It is irrevocable for the five years. It is not refundable, cannot be set against other tax, and gives no foreign tax credit.
The deadlines, which are the trap
The election goes in on a prescribed form by 30 June of the first year of the five-year period. The payment is due by the end of the month after approval. If it is not paid on time the election falls away, and you are back on ordinary rates for a year you had planned around.
Form TD 631 and Circular 02/2026 cover it. There was also a transitional window for people who became deemed domiciled in 2024, 2025 or 2026, who could apply by 30 June 2026.
When it is worth paying
Compare EUR 250,000 over five years against five years of the ordinary charge. From 2026 a domiciled resident pays 5% defence contribution on dividends. So the election costs EUR 50,000 a year and the alternative costs 5% of your dividends.
They break even at EUR 1,000,000 of dividends a year. Below that, paying the ordinary 5% is cheaper. Above it, the lump sum wins, and the more you take the better it gets.
| Dividends a year | 5% defence tax | Lump sum equivalent |
|---|---|---|
| EUR 400,000 | EUR 20,000 | EUR 50,000 |
| EUR 1,000,000 | EUR 50,000 | EUR 50,000 |
| EUR 3,000,000 | EUR 150,000 | EUR 50,000 |
That is arithmetic on the two rates, not advice on your position, and it ignores interest income and anything else the contribution reaches.
Why it matters now rather than in 2043
Mostly it does not. If you move to Cyprus this year, this is a decision for your seventeenth resident year. What it changes today is the shape of the regime: non-dom status used to end in a cliff, and now it ends in a priced option. For someone deciding whether Cyprus is a twenty-year plan or a five-year one, that is worth knowing.
The election is in Law 245(I)/2025, which inserts the new section 3D into the defence contribution law.
Common questions
- What is the Cyprus EUR 250,000 lump sum?
- An election under the new section 3D of the Special Contribution for the Defence Law: a flat contribution of EUR 50,000 a year, paid as a single EUR 250,000 payment covering five years, for someone who has become deemed domiciled after 17 of 20 resident years.
- Who can elect it?
- A person without a Cyprus domicile of origin who becomes deemed domiciled under the 17-of-20 rule. It is available for up to two five-year periods.
- What are the deadlines?
- The election is made on a prescribed form by 30 June of the first year of the period, and the payment is due by the end of the month after approval. Miss either and the election falls away.
- Is it refundable?
- No. It is not refundable, cannot be set off against other tax, and carries no foreign tax credit. It is irrevocable for the five years.
Whether Cyprus works for you depends on how you earn
Where you live is only half of it. We can walk through your position with you, including the cases where Cyprus tax residency does not give the result people expect. This is general information, not tax advice for your circumstances.
Sources
Every legal, fee and procedural statement on this page is taken from the sources below and was checked on 2026-10-22. Where they change, this page changes.
- Law 245(I)/2025 amending the Special Contribution for the Defence Law (cylaw.org) — Deemed domicile after 17 of 20 years, dividend SDC rates and the EUR 250,000 lump-sum option
- Tax Department: Tax Residency / Domicility (gov.cy) — The 183-day and 60-day rules and non-dom status
Related
This page is general information about Cyprus rules as published by the authorities named above. It is not legal or tax advice for your circumstances, and immigration outcomes depend on your nationality, documents and individual case. See our legal and tax information disclaimer.