Cyprus non dom income tax: what still gets taxed
The exemption is narrower than the sales pitch. Here is which income it covers and which it never touches.
Last verified 2026-10-22Next review 2027-01-223 official sources
Whether Cyprus works for you depends on how you earnTalk it through
Cyprus non dom income tax is nil on exactly two things, dividends and interest, and completely ordinary on everything else. The exemption people describe as a zero-tax regime is narrow, specific, and nothing to do with the salary you pay yourself.
Cyprus non dom income tax: what is exempt
Dividend income is exempt from income tax under section 8(20), for every Cyprus resident. From 2026 all interest income of individuals is exempt too, under the new section 8(19), and is charged to the Special Defence Contribution instead, which is where domicile matters. Gains on securities other than Cyprus property-related shares are exempt under section 8(22).
What is not
| Taxable income | Rate from 2026 |
|---|---|
| up to EUR 22,000 | 0% |
| EUR 22,001 to 32,000 | 20% |
| EUR 32,001 to 42,000 | 25% |
| EUR 42,001 to 72,000 | 30% |
| over EUR 72,000 | 35% |
Salary from a Cyprus job runs those bands. So does self-employed profit, a pension, and rental income, which also carries the health contribution and, until 2026, carried the defence contribution as well.
Why this changes how founders pay themselves
A Cyprus company pays 15% on profit and the dividend out of it meets no income tax and, for a non-dom, no defence contribution. A salary out of the same company meets the bands above plus social insurance at 8.8% and the health contribution at 2.65%, with the employer paying its own share on top.
That points strongly at a modest salary and the rest as dividends. It is not a loophole; it is what the two rates are. What it does require is that the salary be defensible as payment for what you actually do.
The exemption that does apply to salary
If you are new to Cyprus and pay yourself more than EUR 55,000 from a Cyprus employment, 50% of it is exempt for 17 tax years under section 8(23A), provided you were not Cyprus resident for the 15 consecutive years before the employment started and it began on or after 1 January 2022. It is once per lifetime and employment income only.
That is the one place where a larger salary can beat a dividend, and it is worth modelling rather than assuming either way. The bands and the exemptions are both in the consolidated Income Tax Law.
Common questions
- Is all income tax-free for a Cyprus non-dom?
- No. Dividends and, from 2026, all interest income of individuals are exempt from income tax. Salary, self-employed profit, pensions and rent are taxed on the ordinary bands.
- What are the bands?
- Nil up to EUR 22,000, then 20%, 25%, 30% and 35% above EUR 72,000, from tax year 2026.
- Does non-dom status affect the bands?
- No. Non-dom status affects the Special Defence Contribution, not income tax. The bands are the same for everyone.
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.
- Income Tax Law 118(I)/2002, consolidated text (cylaw.org) — Tax residency (section 2), dividend exemption (section 8(20)), IP Box (section 9(1)(κ)) and rates
- Law 244(I)/2025 amending the Income Tax Law, Official Gazette No. 5070 of 31 December 2025 (cylaw.org) — 15% corporate tax, the 2026 60-day rule, personal tax bands and the 8% crypto rate, from 1 January 2026
- 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.