Tax certificate for Cyprus residents – is it worth to apply for?

As a general rule, individuals who spend at least 183 days per calendar year in Cyprus are considered Cyprus tax residents.

However, according to the “60-day rule” introduced in 2017, also a person who satisfies all the below conditions can become a Cyprus tax resident:

1. residing in the territory of Cyprus for at least 60 days in a tax year;
2. not spending more than a sum of 183 days in any other jurisdiction within a tax year;
3. not being a resident for tax purposes of another jurisdiction within the same tax year;
4. carrying on a business / being employed / holding an office in Cyprus during the tax year;
5. maintaining a permanent home in Cyprus (owned or rented).

How to be sure that our tax residency status is also recognised by foreign authorities and we are not under a risk of a double taxation?

For this purpose, an individual residing in Cyprus can obtain the Tax Residency Certificate (TRC).

The Certificate is a document issued by the Cyprus Tax Office and officially confirms that an individual is a Cyprus tax resident in a relevant year. If the tax residency of a person is questioned by foreign tax authorities (usually a tax office), such person can present the TRC as a proof of his/her status.

In order to apply for the Certificate from the Cyprus Tax Department, the below documents are required:

1. IR1 forms, from the year when the employment in Cyprus started (can be prepared by IBCCS TAX);
2. Rental Agreement  or a tittle deed of property (stamped by the Tax Department);
3. If you are a director or a shareholder of a company in Cyprus, they need Directors & Secretary certificate, Shareholder’s Certificate and Incorporation Certificate;
4. Utility bill: EAC bill or Water Supply bill for the whole year;
5. Residency Permission or Yellow Slip;
6. Valid Passport;
7. Bank Statement for the year preceding the application’s year;
8. Statement regarding the country which could request the TRC (for example a home country or a country of previous residency/citizenship, or a place with any business/family ties).

In addition to the above, the tax department may also request boarding flights passes to prove that an individual has spent more than 60 days with a year in Cyprus.

We strongly advise to apply for the Certificate for each year of residency accordingly since in our opinion the issuance of the document is worth the effort.

As always, we are happy to assist our clients and any Cyprus residents in the procedure of application and collection of the required documents. In case of any questions, please contact us by e-mail: [email protected], call: +357 222 58 777, or visit our office in Limassol.