The non-dom regime in Cyprus: no defence contribution on dividends and interest, and what changed in 2026

Does Cyprus have a special tax regime for newcomers? Yes, and the best known is the non-dom. Anyone who is tax resident in Cyprus but not domiciled there pays no defence contribution on dividends and interest. That contribution is the separate levy Cyprus puts on this kind of income, alongside income tax. As a Dutch citizen you usually have no Cypriot domicile of origin, so the regime applies to you until you have lived in Cyprus for seventeen of the last twenty years. The finding at the source is what comes after that. Since 1 January 2026 you can extend the exemption twice by five years, for € 250,000 per period. And the pitfall: the exemption is not automatic, and you still pay the healthcare contribution to GeSY.

Which schemes are there?

Scheme	For whom	What it gives	Watch out
Non-dom	tax resident without a Cypriot domicile	no defence contribution on dividends and interest	after 17 of the last 20 years as a resident you count as domiciled
Non-dom extension (since 2026)	anyone who counts as domiciled after 17 years	another five years of exemption, at most twice	€ 250,000 per period, apply before 30 June of the first year
Foreign pension	tax resident with a pension from abroad	5% on the part above € 5,000, or the normal bands	choose every year; the tax treaty takes precedence
First job in Cyprus	anyone who lived outside Cyprus before that job	20% of salary deductible up to € 8,550, or 50% for a salary above € 55,000	claim via form T.D.59A
Normal bands	everyone	0% up to € 22,000, then 20% to 35%	applies from tax year 2026

When are you tax resident?

If you spend more than 183 days in Cyprus in a tax year. The day of arrival counts as a day in Cyprus, the day of departure as a day outside. There is also the 60-day rule: at least 60 days in Cyprus, no more than 183 days anywhere else, a business or job in Cyprus, and a permanent home on the island that you own or rent. If the work stops during the year, you are no longer resident under that rule for that year.

What does the non-dom cover, and what not?

Anyone without a domicile in Cyprus, or who is not tax resident, pays no defence contribution on interest and dividends. Rent was also subject to the defence contribution up to and including 2025; that levy was abolished for everyone from 2026. Anyone who is domiciled pays, since 2026, 5 percent on dividends from profits earned after 1 January 2026, against 17 percent before. On interest it remains 17 percent.

What the non-dom does not cover is the contribution to the GeSY health system. That is 2.65 percent, not only on salary and pension but also on income such as rent, interest and dividends, up to a total income of € 180,000 a year. Only people who are not tax resident pay no GeSY contribution on dividends and interest.

You apply for the exemption. If you believe you have no domicile in Cyprus, you submit form T.D.38 to the tax office of your district. To prevent the contribution being withheld on your interest or dividends, there is a separate declaration, form T.D.624/NP. Anyone who submits nothing runs the risk that the contribution is withheld anyway.

How does the extension after seventeen years work?

Anyone who has been tax resident for seventeen of the last twenty years counts as domiciled for the defence contribution, and stays so until they have been non-resident for twenty years. Since 1 January 2026, anyone without a Cypriot domicile of origin can extend the exemption: twice five years, for € 250,000 per period, equal to € 50,000 a year. The choice is irrevocable and not automatic. You apply per period before 30 June of the first year, with form TD 631, and pay the full amount by the end of the month after the application is approved. The amount is not refunded and not offset against other taxes. Too late, and you pay the ordinary contribution that year.

And the 5% on your Dutch pension?

A Cyprus tax resident with a foreign pension chooses every year between the normal bands and a flat rate of 5 percent on the part above € 5,000. The ministry itself adds that the provision in the tax treaty has to be taken into account, and for Dutch people that is the heart of the matter. Which country may tax your pension and AOW, and why the 5 percent stays on paper above a certain threshold, is explained in AOW, pension and tax in Cyprus.

What does this mean for your tax return?

That you file it, even if there is little to pay. Since tax year 2026 every tax resident aged 25 to 70 files a return, whatever their income. In that return you make the pension choice, and there you claim the deduction for a first job. You arrange the tax number for it after your yellow slip; how that works is in the Cypriot numbers.

In Vertrekklaar this is phase 5 of 5 of the journey, step 5.3: the same steps, but for your situation — in your order, tickable, and with the deadlines watched. See the whole journey to Cyprus or go straight to step 5.3 in the open plan.