Cyprus

What is the sixty-day rule?

It is the most flexible tax residency arrangement in the European Union, specifically targeting highly mobile individuals. It allows you to be considered a tax resident of Cyprus with just sixty days of presence in the country, subject to three cumulative conditions: not staying in any other single state for more than 183 days during the year; engaging in business activity, holding a job, or holding a corporate office in a Cypriot company (a condition that must be met throughout the year); and finally, having permanent accommodation in Cyprus, whether owned or rented. A fourth condition—that of not being a tax resident of any other state—was in place until December 31, 2025, but was removed as of January 1, 2026 (Cyprus Tax Department). Its removal simplifies access to Cypriot status, but it does not resolve issues regarding the country you are leaving, where the full assessment still applies.

Does the sixty-day rule work for a French national?

It does work, but it does not exempt you from actually relinquishing French tax residency—and that is where most plans run into trouble. France applies its own criteria: household, principal place of stay, main professional activity, and center of economic interests. Meeting just one of these is enough to maintain French tax domicile. Someone who spends sixty days in Cyprus, one hundred days in France, and the rest elsewhere—with their family remaining in France—would still be considered a French tax resident, despite holding a perfectly valid Cypriot certificate. The sixty-day rule is an excellent tool for truly nomadic individuals with no ties; it is not a shortcut for those who keep their center of life in France. We verify this condition before anything else.

What changed with the 2026 tax reform? Several parameters changed on January 1, 2026, requiring calculations based on the previous framework to be redone. Corporate tax rose from 12.5% ​​to 15% (Cyprus Tax Department)—aligning with the minimum rate resulting from OECD initiatives—thereby eliminating one of the jurisdiction's historic selling points without rendering it uncompetitive within Europe. Additionally, the Special Contribution for Defence on dividends was lowered for "domiciled" residents; this narrows the gap between the two statuses without eliminating it entirely, as "non-domiciled" individuals remain fully exempt. Personal income tax brackets were also revised. These changes do not undermine Cyprus's appeal for a dividend-based income profile, though they do alter the resulting amounts.

How does an executive based in Cyprus receive remuneration?

The classic trade-off lies between salary and dividends, and for a non-domiciled individual, the balance tips decisively in one direction. Salaries paid by a Cypriot company are subject to progressive income tax rates, featuring an initial tax-free bracket and a partial exemption—subject to conditions—for employment income exceeding a certain threshold for new residents. Dividends, conversely, are exempt from Cypriot income tax and, for non-domiciled individuals, from the Special Contribution for Defence; only the capped health contribution remains payable. The standard approach, therefore, is to pay a moderate salary commensurate with the duties actually performed, and then distribute the remainder. This structure must remain defensible regarding the company's economic substance and transfer pricing regulations.

Does the "sixty-day rule" hold up under a French tax audit?

As Cyprus is a European Union member state, the conditions for deferring payment of the "exit tax" are highly favorable. The Franco-Cypriot tax treaty allocates taxing rights and sets out tie-breaker rules for cases of dual residence, applied in a specific order of precedence. This latter point warrants particular attention for those relying on the "sixty-day rule": a brief stay in Cyprus makes the criteria regarding a permanent home and the center of vital interests all the more decisive; consequently, the Cypriot residence must be genuine and actually occupied, and ties to France must have been effectively reduced. Any retained French-source income remains taxable under the rules applicable to non-residents.

What is the Special Contribution for Defence, and who pays it?

It is a tax levied on the passive income of Cypriot-domiciled residents—income from which "non-domiciled" status specifically grants an exemption. It applies to dividends, passive interest, and rental income received by resident companies and by individuals who are both resident and domiciled in Cyprus (Cyprus Tax Department). A reform that came into effect on January 1, 2026, modified the rates for domiciled residents. Holders of non-domiciled status...