Am I domiciled in Cyprus? Domicile and the defence contribution

You need this if

• You are a Cyprus tax resident and receive dividends or interest, from Cyprus or from abroad.
• Your father was Cypriot, or had his home in Cyprus when you were born, but you grew up or lived for years abroad.
• You have lived in Cyprus for a long time and want to know in which year the 17-of-20 rule reaches you.
• You left Cyprus after many years of residence and may come back: from 2026 the deemed domicile stays with you.

You do not need this if

• You are not a Cyprus tax resident for the year. The defence contribution does not reach a non-resident, whatever their domicile.
• Your income is salary, pension or business profit only. Domicile does not change income tax: circular 2016/8 says a non-dom’s income from inside and outside Cyprus is taxed as anyone’s.
• You already know you are not domiciled and need the paperwork. The declaration on form T.D.38 is the non-dom guide.
• Your only relevant income from 2026 is rent. The defence contribution on rents was abolished from 1 January 2026 for everyone.

• The list of years in which you were a Cyprus tax resident, year by year, going back at least 20 years before the tax year in question.
• Your birth certificate, and your father’s — or your mother’s, where she is the parent that decides it — with evidence of where that parent lived permanently when you were born: passports, residence and employment records.
• Whether your father was alive when you were born and whether you were born in wedlock. Cap. 195 turns on both.
• If your domicile of origin may be Cypriot: evidence of the years you were not resident here, such as foreign tax certificates, foreign utility bills, and foreign employment and social insurance records.
• Your dividends and interest for the year, and for each dividend the year of the company’s profit it was paid from.

1. 1

   Start with residence

   The defence contribution law defines its “resident” as a person who is a tax resident for income tax and, in addition, has a domicile in Cyprus. A non-resident is outside the contribution whatever their domicile, so the first question is residence for that year — the 183-day or the 60-day rule.

2. 2

   Count your resident years in the 20 before the tax year

   Whatever your domicile of origin, if you were a Cyprus tax resident for at least 17 of the last 20 years before the tax year, the law treats you as domiciled. It is the first question in the Tax Department’s own decision tree, and a yes ends the analysis. The year being assessed is not in the count: circular 2026/2 takes someone resident from 2010, who completes 17 years in 2026, and treats them as domiciled from 2027.

3. 3

   From 2026, ask whether you were ever deemed domiciled before

   Ν.245(Ι)/2025 rewrote the 17-of-20 proviso from 1 January 2026 and added a second limb: once you have been deemed domiciled in any year, you keep that domicile until you have completed 20 years in which you were not a Cyprus tax resident. Circular 2026/2 adds that those 20 years need not be consecutive, and gives the example of someone resident from 2008 to 2024 who leaves at the end of 2024: they are deemed domiciled in 2025, their first year abroad, and if they stay non-resident from 2025 to 2044, 2045 is the first year they are free of it. For 2025 and earlier the law had only the count.

4. 4

   Work out your domicile of origin

   Domicile of origin is the one you acquire at birth, under the Wills and Succession Law, Cap. 195. A child born in wedlock during the father’s lifetime takes the father’s domicile at the time of the birth; a child born out of wedlock or after the father’s death takes the mother’s. Circular 2016/8 puts it practically: your domicile of origin is Cyprus if, when you were born, your father’s domicile of origin or of choice was Cyprus. If it was not, you are not domiciled — unless one of the two steps above catches you.

5. 5

   Cypriot domicile of origin: test the 1995–2014 exception

   The law excludes a person who was not a Cyprus tax resident for at least 20 consecutive years immediately before the provision came into force on 16 July 2015. Circular 2016/8 reads that as non-resident in every year from 1995 to 2014. If that is you, you are not domiciled under the domicile-of-origin rule.

6. 6

   Otherwise, test the domicile-of-choice exception — both halves

   The other exclusion needs two things at once: you acquired and keep a domicile of choice outside Cyprus, and you were not a Cyprus tax resident for any period of at least 20 consecutive years before the tax year. A domicile of choice is acquired by settling in a country with the intention of living there permanently or indefinitely. Under Cap. 195 the domicile of origin prevails until a domicile of choice is actually acquired, and a domicile of choice lasts until it is abandoned — at which point either a new one is acquired or the domicile of origin revives.

7. 7

   Record the result where it counts

   A resident who is not domiciled claims the exemption on form T.D.38 with its questionnaire at the district office, and gives form T.D.624/NP to each bank or company that pays them interest or dividends so that nothing is withheld; the non-dom guide walks through both. In the 2025 return, the department’s guide says that a person who has filed T.D.38 fills in the exemption years and then clears the income and deductions in the SDC calculation. Circular 2016/8 puts the burden of proving non-dom status on the taxpayer.

   PracticeCircular 2016/8 warns that citizenship and a passport do not by themselves decide domicile either way, and lists the evidence an officer may ask for.

8. 8

   Reaching 17 of 20: the article 3D option

   From tax year 2026, a person without a Cyprus domicile of origin who is deemed domiciled under the 17-of-20 rule may elect to pay the contribution as a flat €50,000 a year instead: €250,000 in one payment for five consecutive tax years, at most two such periods. The application goes on form T.D.631 by 30 June of the first year of the period and needs the Commissioner’s acceptance; the money is due by the end of the month after acceptance. Circular 2026/2 adds that the first period must start in the year you are deemed to acquire domicile. The election is irrevocable, the amount is never refunded and is not reduced by foreign tax. The details are in the non-dom guide.

   PracticeThe window for people deemed domiciled in 2024 or 2025 closed on 30 June 2026; people deemed domiciled in 2023 or earlier cannot use the option at all.

What domicile decides

the defence contribution onlyFor a Cyprus tax resident. Income tax is charged the same whatever the domicile.

Dividends, tax year 2025

17%For a resident who is domiciled; nil for a non-dom.

Dividends, from 2026

5%17% still on dividends from a Cyprus resident company out of profits of 2025 or earlier, received within six years of 1 January 2026.

Interest, 2025 and 2026

17%3% on government bonds and listed bonds; an individual whose total income does not exceed €12,000 is refunded down to 3% through the return.

Rents

2.25% in 2025, none from 20263% on 75% of the gross rent up to 2025; abolished from 1 January 2026.

Deemed domicile

17 of the 20 years before the tax yearWhatever the domicile of origin.

Losing deemed domicile, from 2026

20 years of non-residenceNot necessarily consecutive, counted from the year domicile was deemed acquired.

Exceptions for a Cypriot domicile of origin

twoA domicile of choice abroad plus 20 consecutive non-resident years before the tax year; or non-resident in every year 1995–2014.

Article 3D

€250,000 per five yearsIn one payment; at most two periods; not open to a Cyprus domicile of origin.

• Treating domicile as residence. You can be a Cyprus tax resident and not domiciled; the defence contribution needs both.
• Treating a passport as the answer. Circular 2016/8 says citizenship or a passport alone does not decide domicile, in either direction.
• Counting the current year into the 17. The law counts the 20 years before the tax year; circular 2026/2 dates the domicile from the year after the seventeenth resident year.
• Assuming that leaving Cyprus ends a deemed domicile. From 2026 it lasts until 20 years of non-residence, and they need not be in a row.
• Relying on a domicile of choice abroad alone to shed a Cypriot domicile of origin. The first exception also needs at least 20 consecutive years of non-residence before the tax year.
• Filing T.D.38 after the seventeenth year. The 17-of-20 rule overrides the domicile of origin, so there is nothing left for the declaration to claim.
• Moving shares or deposits to a non-dom spouse or relative to put the income outside the charge. Article 4A lets the Commissioner charge the contribution anyway, where avoiding it was a main purpose, and collect it from either side.
• Missing 30 June of the year the domicile arrives. Under circular 2026/2 the first five-year period has to start in that year, and a late application is not accepted.

Anything marked “practice” is what the department does in the office, not a rule you can hold it to. Rules carry a source.

• Tax Department — Tax Residency/DomicilityThe department’s statement of the domicile rules, with every form linked from the page.
• Form T.D.38 — declaration of individual for exemption as non-domiciled (2016)Filed with questionnaire T.D.38Qa, and T.D.38Qb where a domicile of choice is claimed.
• Form T.D.631 — application for the alternative method under article 3D (2026)
• Application for the alternative method — the department’s instructions pageWho completes it, submission through a Tax For All message, the timing and the payment.
• Tax Department — Έκτακτη Αμυντική Εισφορά (rates by year)The contribution’s rates from 2026 and for 2024–2025; in Greek.

• Special Contribution for the Defence Law 117(I)/2002, consolidated text on CyLaw: art. 2 (the resident who also has a domicile), art. 2(3) with the 2026 proviso, art. 3 (dividends, the transitional 17%), art. 3D (the alternative method), art. 4A (transfers to a non-dom relative)
• Ν.245(Ι)/2025, art. 2(b): the 17-of-20 proviso rewritten with the 20-year retention limb; art. 4: article 3D inserted; art. 10: in force from 1 January 202631.12.2025
• Special Contribution for the Defence Law as in force until 2025, consolidated by the Tax Department up to 220(I)/2025: art. 2(3) as enacted by 119(I)/2015 from 16.7.2015, with the count and no retention limb
• Wills and Succession Law, Cap. 195, arts. 6 to 11: domicile of origin and of choice, which parent decides, and when each prevails
• Circular 2016/8: domicile under Cap. 195 and under the defence contribution law, the 1995–2014 reading of the second exception, the decision tree, the anti-avoidance rule, the burden of proof and the evidence28.06.2016
• Circular 2026/2 on article 3D: who may elect, the 17-of-20 count and its examples, 20 non-resident years not necessarily consecutive, the first period starting in the year of deemed domicile, the 2024–2025 window, payment and irrevocability29.05.2026
• Tax Department, “Tax Residency/Domicility”: domicile of origin and of choice, the two exceptions, the 17-of-20 rule and its retention, and the tax consequences
• Tax Department, “Έκτακτη Αμυντική Εισφορά”: the rates from 2026 and for 2024–2025 on dividends, interest and rents
• Guide for the completion of the income tax return for individuals 2025: the SDC calculation for a person who has filed T.D.38, and the refund of SDC on interest where total income does not exceed €12,00006/2026
• Form T.D.631 and its instructions page: submission through Tax For All, the 30 June deadline, payment after approval2026