What non-dom actually is
The status has nothing to do with applying for a tax break. It turns on the definition of a single term in a single statute.
The Special Defence Contribution Law 117(I)/2002 charges a contribution on dividends, interest and — up to and including tax year 2025 — rents. But only a “resident of the Republic” is liable, and that term requires two things at once:
- tax residency under the Income Tax Law, and
- a domicile in Cyprus.
Meeting only the first puts you outside the definition. That is non-dom: resident but not domiciled, and therefore outside the contribution. What residency itself turns on is in the guide to tax residency.
The same applies, incidentally, to people not resident in Cyprus at all — they are not liable either, just for the other reason.
The calculation almost no guide completes
“0% on dividends” is the figure the status is sold with. It is wrong, and the reason sits in a statute that has nothing to do with the defence contribution.
The General Healthcare System Law 89(I)/2001 defines “income” as an individual’s income from the sources in Article 5 of the Income Tax Law, other than earnings and pensions, and expressly includes dividends — “as defined in the Special Defence Contribution Law”. So the health statute borrows its dividend definition from precisely the law a non-dom is exempt from.
Under Article 19(1)(ζ), every person with such income pays 2.65% on it. The word domicile does not appear once anywhere in the General Healthcare System Law.
The advantage is substantial, then — it is simply not zero. And it has become smaller: while the contribution on dividends stood at 17%, a non-dom saved seventeen points. Since the reform, for profits arising from 2026, it saves five. What else changed is in the overview of the tax reform.
The GESY ceiling narrows the gap the more you earn. Contributions are levied only on the first €180,000, aggregated across earnings, pensions and other income — in that order. Someone already drawing €180,000 in salary pays no GESY on dividends beyond it. The maximum is €4,770 a year.
What the contribution reaches — and what it no longer does
- Dividends — 5% for profits arising from 1 January 2026. For Cyprus-source dividends out of profits up to 31 December 2025 it remains 17%, provided they are received by 31 December 2031.
- Interest — 17% for individuals, reduced to 3% on certain government, EU and listed securities. Companies are exempt and pay only corporation tax on the net amount.
- Rents — abolished. The contribution on rental income was levied up to and including tax year 2025 and has since fallen away. Rents are now subject to income tax only. For non-doms that changes nothing; for domiciled individuals it does.
How domicile is determined
Not under tax law but under the Wills and Succession Law — which is why the concept behaves unfamiliarly for tax purposes.
Domicile of origin. Arises at birth and is normally the father’s domicile at that time. Where the child was born outside marriage or after the father’s death, it may be the mother’s. It is neither nationality nor residence.
Domicile of choice. Arises where someone settles in a country intending to reside there permanently or indefinitely. Whether that is so is determined on the facts, particularly the person’s actions and conduct.
The order. The domicile of origin continues until a domicile of choice is acquired. A domicile of choice continues until abandoned — through a new domicile of choice or through revival of the domicile of origin.
Two exceptions for Cyprus origin. Someone with a Cyprus domicile of origin may still be treated as not domiciled:
- where a domicile of choice outside Cyprus has been acquired and maintained and there was no Cyprus tax residency in the 20 years immediately preceding the tax year, or
- where the person resided abroad for more than 20 consecutive years before 16 July 2015.
The rule that ends the status
Regardless of domicile of origin: anyone tax resident in Cyprus for income tax purposes for at least seventeen of the last twenty years immediately before the tax year is deemed to have acquired a Cyprus domicile.
That domicile is retained until the person completes twenty years without Cyprus tax residency.
The €250,000 extension
This is the part that appears in almost no guide, and it comes from the reform.
Someone who has no Cyprus domicile of origin and is deemed domiciled only through the 17-of-20 rule may elect the alternative method of imposition of the contribution. That extends the exemption by up to two further five-year periods, on payment of €250,000 for each period.
The basis is Article 3D of the Special Defence Contribution Law as amended, together with circular 02/2026. It is claimed on form T.D. 631 of 2026.
Whether it pays is pure arithmetic: €250,000 over five years is €50,000 a year. At the 5% rate on dividends it starts to make sense somewhere above a million euros of distributions a year — at 17% on older profits, considerably sooner.
The forms
| Form | Purpose |
|---|---|
| T.D. 38 (2016) | Individual’s declaration claiming the non-dom exemption |
| T.D. 38 questionnaire A (2017) | Determining the domicile of origin |
| T.D. 38 questionnaire B (2017) | Determining the domicile of choice |
| T.D. 624/NP (2017) | Declaration to waive deduction of the contribution |
| T.D. 631 (2026) | Application for the alternative method, €250,000 per five-year period |
All appear on the Tax Department’s current list of forms.
What non-dom does not cover
The status bears on the Special Defence Contribution and nothing else. All of the following are untouched:
- GESY at 2.65% on dividends, interest and rents, up to the €180,000 ceiling
- Income tax on salary, profit from self-employment and rents — see the guide for self-employed people
- Corporation tax on the company, 15% since tax year 2026
- Social insurance, which attaches to employment or self-employment, not to domicile or residency
- Every filing obligation — the status exempts you from a contribution, not from returns. What falls due when is in the tax deadlines.
What we could not verify
- Whether the €250,000 per period is payable up front or in instalments. Circular 02/2026 exists only in Greek and was not retrievable through the published pages; the Tax Department page states only the amount and the periods.
- How long recognition as a non-dom takes after filing T.D. 38. No official page states a period.
- Whether the Tax Department requires evidence beyond the questionnaires, for instance on the father’s domicile at birth. The questionnaires themselves set the scope.
- Whether GESY applies at the same rate to dividends from abroad. The definition of income does not distinguish by source, but we found no express statement on the point.
- Exactly when the contribution on rents was repealed. Confirmed is that it was levied up to and including tax year 2025 and has since fallen away; we did not read the amending law itself.