Retiring in Cyprus: Non-Dom Tax Benefits, Residency and Tax Planning Explained

(real client enquiry)

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Dear CYAUSE,

I was searching online for a professional tax advisor in Cyprus and came across your website, which I found very interesting.

I have been gathering information regarding the fiscal advantages of transferring one’s tax residence to Cyprus and obtaining tax residency under the 60-day non-dom regime. Through online research and discussions with contacts, I believe I now have a good general understanding of the requirements and potential benefits.

My wife and I are therefore considering retiring in Cyprus in 2027. We hold dual Italian and Swiss nationality and currently reside in Switzerland. I am still working at present, with plans to retire in 2026.

Before making any final decision, we would like to obtain a reasonably accurate assessment of our potential tax liability in Cyprus once non-dom tax residency is obtained.

Accordingly, we are looking to engage an accounting and tax professional to perform an initial tax simulation, allowing us to compare our prospective tax position in Cyprus with our current tax liability in Switzerland and to better understand any potential advantages.

Please let us know whether you provide this type of service and, if so, what your hourly rate would be.

I look forward to hearing from you.

Kind regards,

Dear Client, 

Nice to e-meet you and thank you for your interest in our services. 

We can definitely assist you with all these topics you have mentioned as well as with further related services (such as registrations, tax declarations submissions etc). 

In order to advise you we will need some important information such as the number of days you are willing to spend in each country, the type of income you have (salaries, dividends, rental income, pension-in the near future etc) and the properties you hold (if any) in each country (additional questions may be added depending on your case). 

Our fees for the consultation are EUR 300 + VAT (if applicable) 

Kindly let us know if the above mentioned fees are accepted and if yes kindly send us your KYC (Know Your Client) documents i.e. scanned copy of passport and recent utility bill so that we proceed with the next steps! 

At your disposal, 

Sincerely, 

Dear CYAUSE,

Thanks for your email and related info.  I am glad you can assist us in our project to move fiscal residence from CH to CY, probably in Paphos district, but we are also considering the Limassol area. 

In principle we don't mind spending 183 days in CY but, if feasible, we would prefer to obtain more flexibility and apply for the 60 days rule. Depending on the residence status obtained,  probably we may spend about 4 /5 months in IT, where we have a secondary residence, and max 30 to 45 days in CH. The rest of the year we plan to enjoy our retirement in CY and traveling around.

We are also interested to know more about the other services you offer, once we have finalized our decision to move our residence to CY if fiscally convenient.  Obviously, we like the island and its lifestyle and think it is a wonderful place to spend our retirement time, but the fiscal impact definitely has an important role in our final decision. 

I appreciate your diligence to apply the KYC verification. Here find attached recent electricity and telecom bills as well copy of our Swiss passports.  We both have dual citizenship thus let me know if you also need copy of our Italian passports. 

Finally, before moving ahead and sharing additional personal data, we would prefer to have a live conversation possibly via teleconference.  Let us know if you are available next week, Monday or Tuesday at 11 or 12 CY time.  If so, please send us an invite for a video call and relevant credentials to join. 

Meanwhile, would you please specify if the consultation fee is a lump sum for the Tax liability simulation or is your hourly fee. In case this is your hourly fee, could you please estimate the number of hours you may need to prepare such a tax liability simulation.

Kind regards, 

Dear Client, 

Thank you for your email and the shared documents. We shall discuss the details during our call. 

Kindly note that we will need the Italian passports as well, yes (you can share them after our call as you feel more comfortable). 

With regards to our call kindly be informed that Tuesday is fully booked for this week. I suggest Thursday or Friday, kindly share your availability. 

Last but not least, the cost of EUR 300 + VAT for the advisory is a lump sum. 

Kind regards, 

A call between CYAUSE and the Client followed.

Dear Client,

It was a pleasure meeting you both earlier today. 

As per our discussion, please share with us the table of assets and income so that we proceed with the relevant tax computation (estimated). Kindly include your Italian passports as well. 

Once we have the above, I will provide you with details about the resulting taxes, our offer for the required services & some important information we've discussed about. 

In the meantime, our financial controller will send you the invoice to be paid. 

Thank you in advance, 

Kind regards,

Dear CYAUSE,

Thank you for your time and the interesting information you shared with us about relocation in Cyprus.  We confirm  that we are particularly interested in obtaining the non-dom status possibly under the 60 days rules.  

As discussed please find attached copy of our Italian passports and an excel file with details of our income, investments and real estates. We believe we have

listed enough information to perform a good estimation of our tax liability as fiscal resident in Cyprus.  

As the project will move forward we may discuss further in details additional assets and potential income (see our  notes in the excel spreadsheet) 

Finally we understood that Cyprus  residents can claim tax credit for certain tax amount paid abroad in country with double taxation treaty with Cyprus. I believe this is something we should assess at a later stage.  

Please do not hesitate to email us in case you need any additional information or clarifications. 

We are looking forward to hearing again from you soon 

Kind Regards,

Dear Client, 

I hope you are doing well! 

Thank you very much for the information and documents you have shared. 

As discussed, below you will find our fees and some important information:

A) Costs: 

• Registration with the tax: EUR 200 + VAT per application 
• Non-domiciled application: EUR 800 + VAT per application 
• Yellow Slip: EUR 600 + VAT per application + Disbursements (approx. EUR 50) 
• Reg. with the social securities: EUR 150 + VAT per application (for self-employed) 
• Preparation and submission of personal tax declaration: EUR 225 + VAT per application (per annum) 
• Incorporation of a Cypriot company: EUR 700 + VAT + Disbursements (approx. EUR 600)
• Once-off mandatory services for the Cypriot company (tax registration, UBO declaration, e filing access codes etc): EUR 550 + VAT Legal entity, accounting, audit tax etc 
• Accounting, Audit and Tax Services for the Company: Depends on the volume and complexity 

*Disbursements have been excluded from the above mentioned costs. 

**Profile creation and access to various governmental portals has been included in the above-mentioned cost

B) Tax Residence in Cyprus: 

• Spend in Cyprus at least 183 days during a calendar year (January-December) OR
• Spend in Cyprus at least 60 days and no more than 183 days in any other country during a calendar year (January-December)
•  AND Not to be considered a taxed resident elsewhere. This always depends on the tax legislation of the country you spend days in.

*It is very important to ensure with your consultants that you will not be considered Italy or Switzerland taxed residents. 

C) Yellow Slip: 

In case you exceed 90 days in Cyprus during a calendar year (January-December), you will be obliged to have a residence permit; yellow slip for EU nationals. 

Documents needed for this may be a rental agreement (long-term), utility bills under your name, proof of fixed income showing that you can maintain yourselves (salaries, savings etc), medical insurances (or Gesy/NHS paid through your employment if applicable) etc. 

D) Income Tax Rates for individuals from 2026 onwards:

€0 – €22,000 — 0% (tax‑free)

€22,001 – €32,000 — 20%

€32,001 – €42,000 — 25%

€42,001 – €72,000 — 30%

Above €72,000 — 35%

E) Non-Domiciled Application 

In order to be eligible for this, you will have to be considered a Cyprus taxed resident and show business ties with Cyprus (via employment or self-employment as we discussed - the income has to be real and on-going even if it is low). In addition, long-term rental is required for this as well and no prior ties with Cyprus for the last 17 years (you are already eligible for this one).  

Duration: 17 years (+ 10 years extension under certain conditions) 

F) Tax Simulation 

Clarifications needed

1. Apartment Torrino: Shall I consider full rent to be received or deduct 3-4 months as per your comment?
2. For real estate owned by you and Mrs X: please provide the ownership percentage 
3. Bank and Investments income: kindly separate dividends and interest 
4. Farming Income: Loss 700 euros, kindly confirm 

At your disposal,

Kind regards,

Dear CYAUSE,

1. Apartment Torrino: please consider full rent to be received
2. Real estate ownership percentage: see new excel file version dated 10.02.26
3. Split dividends and interest: see new excel file version dated 10.02.26
4. Farming Income: Loss 700 euros. I confirm 

Should you need any additional data, please let us know.

Kind regards,

Dear Client, 

I hope you are both doing well! 

As per our discussion and based on the information you have provided, below you will find the tax simulation for the year 2026: 

Mrs X:   

                             EUR

Rental income     111,483.90

Dividends            13,922.50

Interest                27,968

Farm in Italy        (700) loss - not taken into consideration

Realised gains     32,000 no taxes apply as long as they are not related to any real estate 

Deductions 

                                                     EUR

Donations                                    300

20% allowance on rental income 22,296.78

Medical fund/Gesy                       4,064.42 payable 

Income tax (Cy)                           17,9870.94

Foreign tax paid                          (5,000)

Final income tax (Cy)                  12,987.94 payable 

Mr X: 

                             EUR

Rental income     88,503.90

Dividends            13,922.50

Interest                27,968 

Pension Switz.    144,450 from 2027

Realised gains     32,000 no taxes apply as long as they are not related to any real estate 

Deductions 

                                                     EUR

Donations                                    300

20% allowance on rental income 17,700.78

Medical fund/Gesy                       4,770 payable 

Income tax (Cy)                           11,619.94

Foreign tax paid                          (0)

Final income tax (Cy)                  11,619.94 payable 

Additional tax on pension           7,051.50  payable  (from 2027)

*Rental income is the main source that generates payable taxes. 

At your disposal for any questions etc. 

Kind regards, 

Dear CYAUSE,

I hope you had a good weekend.  Thanks again for your email with the tax simulation amounts.  We revised in detail  your email and the tax simulation calculation. We struggled a bit to understand the basis of such  calculation because it did not include the explanation of the taxable income calculation but only the tax liability amounts. Hopefully,  I guess we have been finally able to figure out  how you got to the final amounts and create our own tax model on an excel spreadsheet.   

Could you please confirm or correct the following: 

• The tax liability on the pension/annuity is equal to 5% on 141.030,00 (144.450.00 - 3.420)
• The 2026 tax rates are applicable only on Real Estate income, minus deductions (20% and 300 donations!) 
• Interests and dividends income is not taxable in CY
• Capital gains from Real Estate investments outside CY (sale of real estate) will not be taxed 
• Real estate expenses such as mortgage interests, maintenance, agency commissions etc will not be deducted
• Lump sum deduction at 20% of generated income will be applied. 
• Local, city, wealth taxes on Real Estate owned abroad will not be deducted 
• GeSy contribution at 2.65% is calculated on any sort of worldwide income (Real Estate, Dividends, Interests, Pension etc)  capped at 180K
• Capital Gains from investments (realized gains) is not taxable and will not be accounted for GeSY calculation 
• Paid GeSy contribution shall be deducted from the Real Estate Taxable income 

It is not yet totally clear to us: 

• if foreign taxes on income and/or wealth are fully deductible in CY or shall be claimed back from a CY resident to the competent foreign tax authority 
• what evidence or documents is necessary to claim back/deduct such tax paid abroad by a CY resident. 
• since in Switzerland married couples are taxed jointly (one tax declaration per couple), how such taxes will be split in CY between two individuals.  

We appreciate the information you provided us so far, however we certainly need more clarification in order to have a better understanding of our tax liability as a non-dom tax resident in CY. 

While the process to obtain permanent residency and non-dom status seems pretty straightforward, taxation is quite a complex matter and we need to better understand our tax liability before moving further with the residency process.    

How do you suggest we proceed to address our additional questions in more detail? 

Looking forward to hearing back from you soon.  

Best Regards 

Dear Client, 

I hope you are both doing well. 

Please find my answers below in blue:

Could you please confirm or correct the following: 

· The tax liability on the pension/annuity is equal to 5% on 141.030,00 (144.450.00 - 3.420) - Correct 

· The 2026 tax rates are applicable only on Real Estate income, minus deductions ( 20% and 300 donations!)  - Correct. In case you, for example, receive salaries, the tax rates apply as well. In other words dividends and interest were non taxable. 

· Interests and dividends income is not taxable in CY - Correct 

· Capital gains from Real Estate investments outside CY (sale of real estate) will not be taxed - Correct 

· Real estate expenses such mortgage interests, maintenance, agency commissions etc will not be deducted - 20% allowance is considered whether the amount is realistic or not

· Lump sum deduction at 20% of generated income will be applied. - Only for the rental income

· Local, city, wealth taxes on Real Estate owned abroad will not be deducted - Income tax paid abroad will be taken into consideration before you pay any income tax in Cyprus. Other expenses paid for the properties are not taken into consideration (20% allowance is considered whether the amount is realistic or not). 

· GeSy contribution at 2.65% is calculated on any sort of worldwide income (Real Estate, Dividends, Interests, Pension etc)  capped at 180K - Correct. 4% applies for income from self-employment 

· Capital Gains from investments (realized gains) is not taxable and will not be accounted for GeSY calculation - Correct 

· Paid GeSy contribution shall be deducted from the Real Estate Taxable income  - Correct 

It is not yet totally clear to us: 

· if foreign taxes on income and/or wealth are fully deductible in CY or shall be claimed back from a CY resident to the competent foreign tax autority - Are fully deductible as far as the relevant evidence for the paid taxes is available (in case needed)

· what evidence or documents is necessary to claim back/deduct such tax paid abroad by a CY resident. - Submitted tax declaration abroad / proof of payment for the foreign tax 

· since in Switzerland married couples are taxed jointly (one tax declaration per couple), how such taxes will be split in CY between two individuals. - Based on the income % 

Let me know if you need the excel calculation to be shared with you or if you need any further clarifications. 

Kindest regards,