Cyprus dividend tax non dom: what is left after the exemptions

Cyprus dividend tax non dom: the three charges, in order

The income tax exemption is section 8(20) of the Income Tax Law and it applies to every Cyprus resident, domiciled or not. The defence contribution is the one domicile decides, because that law charges only individuals who are Cyprus tax resident and domiciled here.

What the cap means in money

Health contributions stop once annual income reaches EUR 180,000 per person. On dividends alone that is 2.65% of EUR 180,000, so EUR 4,770 for the year, whether the dividend is EUR 200,000 or EUR 2 million.

That makes the effective rate fall as the dividend grows. On EUR 200,000 it is about 2.4%. On EUR 1 million it is under 0.5%.

The number before this number

None of the above is the rate on your money. The company paid 15% corporate tax on the profit first, from tax year 2026. Take EUR 200,000 of company profit distributed to a non-dom resident: EUR 30,000 of corporate tax, then EUR 4,770 of health contribution, so roughly 17% in total.

Still a good number. Not the zero that gets quoted.

The transitional rate worth knowing

If you are domiciled rather than non-dom, dividends paid by a Cyprus company out of profits of tax year 2025 or earlier, received within six years of 1 January 2026, keep the old 17% defence rate rather than the new 5%. That window runs to 31 December 2031.

For a non-dom it changes nothing, because the charge does not apply either way. It matters when a company has old reserves and some shareholders are domiciled here.

The dividend exemption itself is in the consolidated Income Tax Law on cylaw.org, section 8(20).