New Administrative Practice on Cyprus 60-Day Tax Residency

19.12.2025

As of 2017, Cyprus tax legislation provides two alternative tests for determining an individual’s tax residency status: the 183-day rule and the 60-day rule. For tax years prior to 2017, only the 183-day rule applied.

These rules are of particular importance for internationally mobile individuals, entrepreneurs, and directors seeking to establish Cyprus tax residency.

The 183-Day Rule

Under the 183-day rule, an individual is considered a tax resident of Cyprus if they spend more than 183 days in Cyprus during a calendar year.

No additional conditions or qualitative criteria apply under this test.

The 60-Day Rule

The 60-day rule provides an alternative route to Cyprus tax residency for individuals who do not meet the 183-day threshold. An individual will be regarded as a Cyprus tax resident under this rule if, cumulatively within the same tax year, all of the following conditions are satisfied:

• The individual does not reside in any other single state for more than 183 days in aggregate;
• The individual is not considered tax resident in any other country;
• The individual resides in Cyprus for at least 60 days during the tax year; and
• The individual maintains defined economic or professional ties with Cyprus.

Defined Cyprus Ties – Recent Clarifications

To satisfy the requirement of having defined ties to Cyprus, the individual must, during the relevant tax year:

• Carry out business activities in Cyprus, and/or
• Be employed in Cyprus, and/or
• Hold an office (directorship) in a company that is tax resident in Cyprus, provided that such office is not terminated during the tax year.

Clarification on Directorships

Following an internal administrative position adopted by the Cyprus Tax Department, it has been clarified that the mere holding of the title of director in a Cyprus tax-resident company is no longer, on its own, sufficient to satisfy the “defined ties” requirement under the 60-day rule.

This change was implemented internally and without any formal announcement, public guidance, or legislative amendment. As a result, the revised interpretation has emerged through administrative practice rather than through published law, circular, or official notification to the public.

Under this internal position, the Tax Department now treats it as an obligatory requirement that a directorship reflects substantive economic involvement. Applicants are required to provide supporting evidence, such as remuneration in the form of salary, or alternatively a formal directorship agreement may be accepted, evidencing active duties and responsibilities.

The Tax Department has further taken the position that tax residency certificates issued in previous years without such supporting evidence are considered to have been wrongly issued, notwithstanding that such certificates were granted under the administrative practice prevailing at the time.

In particular:

• Evidence of remuneration (salary or director’s fees) received from the Cyprus tax-resident company may be required to demonstrate substantive economic activity; or
• Alternatively, a formal directorship agreement may be accepted as evidence, provided it clearly establishes the individual’s active role and responsibilities within the company.

Each case is assessed on its facts, and the existence of genuine substance and continuity throughout the tax year is critical.

We expect major changes to the tax reforms, as well as improved clarity and transparency in this area.

Permanent Residential Property Requirement

In addition to the above, the individual must maintain a permanent residential property in Cyprus during the tax year. This property must be:

• Owned or rented by the individual; and
• Available for the individual’s use throughout the tax year.

Temporary accommodation or short-term stays will generally not satisfy this requirement.

Calculation of Days for Both Rules

For the purposes of both the 183-day rule and the 60-day rule, days of presence in Cyprus are calculated as follows:

• The day of departure from Cyprus counts as a day of residence outside Cyprus;
• The day of arrival in Cyprus counts as a day of residence in Cyprus;
• Arrival and departure on the same day counts as one day of residence in Cyprus; and
• Departure and arrival on the same day counts as one day of residence outside Cyprus.

The Cyprus 60-day tax residency rule remains a flexible and attractive option for individuals with international activities. However, recent clarifications, particularly regarding directorships and the need for evidence of substance or remuneration highlight the importance of proper structuring and documentation.

Contact us to review whether your current arrangements still meet the 60-day rule requirements.

Author: Kosasvili Georgios

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