In brief
An individual becomes a Cyprus tax resident if they stayed there for more than 183 days in a calendar year, or under the 60-day rule: at least 60 days, no more than 183 days in any other single country, a business, employment or directorship in Cyprus and a permanent home there. A tax resident who is not domiciled in Cyprus (non-dom) is exempt from the Special Defence Contribution, so their dividends and interest are almost entirely exempt from Cypriot tax for up to 17 years, and from 2026 the status can be extended on payment of EUR 250,000 for each five-year period. There is no tax treaty between Israel and Cyprus, so someone who remains an Israeli resident under the centre-of-life test may be taxed in both countries, as of November 2026.
Key takeaways
- 1The 183-day test: anyone who stayed in Cyprus for more than 183 days in a calendar year is a tax resident, with no further conditions.
- 2The 60-day rule: at least 60 days in Cyprus, no more than 183 days in any other single country, a business, employment or directorship of a Cypriot company, and a permanent home in Cyprus. From 2026 the condition of not being tax resident in another country was abolished.
- 3Non-dom: exemption from the Special Defence Contribution (SDC) on dividends and interest for 17 years. From 2026 it can be extended twice by five years, for a one-off payment of EUR 250,000 per period.
- 4Personal tax brackets in 2026: 0% up to EUR 22,000, and 35% above EUR 72,000. A 50% exemption on salary above EUR 55,000 a year for a new employee, for 17 years.
- 5Foreign pensions: 5% on the amount above EUR 5,000 a year, or by election at the ordinary brackets.
- 6There is no tax treaty between Israel and Cyprus, and no social security agreement was found. Double taxation is avoided only through a credit under domestic law.
Cyprus is known in Israel as a “tax haven”, but the reality is more nuanced. The Cypriot non-dom regime grants an impressive exemption on passive income, and the 60-day rule makes it possible to be a tax resident without living on the island for most of the year. On the other hand, there is no treaty for the avoidance of double taxation between Israel and Cyprus, so someone who moves without actually breaking their centre of life in Israel may discover that both countries consider them resident. This guide explains when Cypriot tax residency arises, what tax benefits new residents have after the 2026 reform, and what needs to be checked on the Israeli side.
When do you become a Cyprus tax resident?
An individual is a Cyprus tax resident if they meet one of two tests in the tax year, which is the calendar year: the 183-day test or the 60-day rule. No formal registration is needed to become resident, but to benefit from the status in practice you must register with the tax authority, file returns and hold a tax residency certificate.
- The 183-day test: a stay in Cyprus of more than 183 days in aggregate in a calendar year. That is enough, with no further conditions.
- The 60-day rule: intended for those who do not stay in any one country for most of the year, and all its conditions are cumulative. They are set out in the next section.
What are the conditions of the 60-day rule, and what changed in 2026?
According to PwC, as of 2026 the 60-day rule applies to anyone who meets all the following conditions in the tax year:
- Stayed in Cyprus for at least 60 days.
- Did not stay in any other single country for more than 183 days in aggregate.
- Carried on a business in Cyprus, was employed there, or held office as a director of a company that is tax resident in Cyprus, at any time in the tax year, without the activity or office ending in that year.
- Maintained a permanent residential home in Cyprus, owned or rented, during the tax year.
Until 2025 the 60-day rule had an additional condition: that the individual is not tax resident in another country. According to PwC, this condition no longer applies from 1 January 2026. The implication for Israelis is stark: you can meet the 60-day rule in Cyprus and in the same year remain an Israeli resident under the centre-of-life test. The Cypriot rule does not end Israeli residency, and in the absence of a treaty there is no rule to decide between the two residencies.
How are days of presence in Cyprus counted?
- The day of departure from Cyprus counts as a day outside Cyprus.
- The day of arrival in Cyprus counts as a day in Cyprus.
- Arrival and departure on the same day count as one day in Cyprus.
- Departure and return on the same day count as one day outside Cyprus.
- Documentation: keep a documented day log, with flight tickets and stamps, from day one. The same records will also be used when checking days of presence in Israel, where the counting is different.
What is non-dom status in Cyprus, and why is it the most important status for Israelis?
A non-dom is a Cyprus tax resident who is not domiciled in Cyprus for the purposes of the Special Defence Contribution (SDC). The contribution applies only to someone who is both resident and domiciled. Since dividends and interest are exempt from income tax in Cyprus and are taxed only through the contribution, a resident who is a non-dom is in practice exempt from most Cypriot tax on dividends and interest, from Cyprus and from abroad.
An Israeli whose domicile of origin is not in Cyprus is treated as domiciled for the purposes of the contribution only after being a Cyprus resident for at least 17 of the 20 tax years preceding the tax year. In other words, the basic benefit period is up to 17 years. Anti-abuse rules apply, so complex structures should be examined in advance.
What changed in the non-dom regime in the 2026 tax reform?
The reform, which entered into force on 1 January 2026, kept the non-dom regime and the 17-year period, and added an option to extend it. According to EY and Andersen, someone whose 17-year period has ended may elect to make a one-off payment of EUR 250,000 for each five-year period, for at most two periods, subject to the approval of the Tax Commissioner. According to EY, for periods starting on 1 January 2026 an application had to be filed by 30 June 2026. For an Israeli moving now, the extension is relevant only in 17 years' time. The changes that affect them today are different: the contribution rate on dividends for domiciled residents fell from 17% to 5% on profits from 2026, the contribution on rent was abolished, and the personal income tax brackets were updated.
What does a Cyprus tax resident pay tax on, and at what rates?
A Cyprus tax resident is liable to income tax on worldwide income, not only on what they bring into Cyprus. A non-resident is taxed only on certain Cypriot-source income. The personal tax brackets, according to PwC, from 2026: these brackets match those in the guides Corporate tax in Cyprus and transferring profits to Israel and Tax on rental income in Cyprus. Until 2025 the exempt bracket was EUR 19,500, and the 35% bracket started at EUR 60,001.
| Taxable income (EUR per year) | Tax rate | Cumulative tax at the top of the bracket |
|---|---|---|
| 0 to 22,000 | 0% | 0 |
| 22,001 to 32,000 | 20% | 2,000 |
| 32,001 to 42,000 | 25% | 4,500 |
| 42,001 to 72,000 | 30% | 13,500 |
| Above 72,000 | 35% | - |
What tax relief is available to an employee who moves to Cyprus?
Cyprus offers three partial exemptions on employment income to those who start working there after a period of non-residence, and they cannot be combined. The benefit depends on the level of salary, the date employment starts and previous years of residence. In addition, according to PwC, salary for work performed outside Cyprus for more than 90 days in a tax year, for an employer that is not a Cyprus resident, is exempt from tax in Cyprus. For a resident working remotely for an Israeli employer this may be relevant, but the same income may be taxable in Israel.
| Exemption | Main conditions | Cap | Duration |
|---|---|---|---|
| 50% of salary | First employment in Cyprus starting after 1 January 2022, salary above EUR 55,000 a year, and non-residence for at least 15 consecutive tax years beforehand | No monetary cap | 17 years, once in a lifetime |
| 20% of salary | First employment starting after 26 July 2022, after at least three years of non-residence, where the employee was previously employed outside Cyprus by a foreign employer | EUR 8,550 a year | 7 years from the year after employment starts |
| 25% of salary or business profits | Employment or business in Cyprus between 1 January 2025 and 31 December 2030, income above EUR 30,000 in the first 12 months, and conditions on prior residence and employment | EUR 25,000 a year | 7 years |
How are pensions, dividends, interest and capital gains taxed in Cyprus?
- Foreign pensions for work performed outside Cyprus: tax of 5% on the amount above EUR 5,000 a year (until 2025 the threshold was EUR 3,420). You may elect each year to be taxed at the ordinary brackets.
- Dividends and interest: exempt from income tax. The Special Defence Contribution applies only to someone who is both resident and domiciled, so a non-dom is exempt from it.
- Capital gains: generally not taxed in Cyprus, except gains from real estate in Cyprus or from shares in a company holding real estate in Cyprus. Gains on the sale of securities are exempt from income tax.
- Crypto: from 2026, gains on the sale of digital assets are taxed at a flat 8%, except assets obtained through mining.
- Employee stock options: from 2026, the benefit is taxed at a flat 8%, subject to certain conditions.
A pension from an Israeli pension fund is Israeli-source income, and Israel may withhold tax from it even when the recipient has moved to Cyprus. In the absence of a treaty, there is no agreed arrangement allocating taxing rights, and you should check in advance what credit will be given and in which country.
How much social insurance and health contributions are paid in Cyprus?
According to PwC, in 2026 an employee pays social insurance contributions of 8.8% of salary, and the employer pays a further 8.8%, up to an insurable earnings ceiling of EUR 68,904 a year. A self-employed person pays 16.6% of their income, subject to a floor and a ceiling. In addition, contributions to the General Healthcare System (GHS) apply.
- GHS for employees: 2.65% of salary.
- GHS for the self-employed: 4.00% of income.
- GHS for pensioners: 2.65% of the pension.
- GHS on passive income such as rent, interest and dividends: 2.65%. GHS contributions are capped at annual income of EUR 180,000. Whether the contribution applies to a non-dom's passive income needs to be checked in the individual case.
According to the National Insurance Institute's (Bituach Leumi) list of agreements, no social security agreement between Israel and Cyprus was found. The possible consequence is an obligation to pay in both countries during certain periods, and no aggregation of insurance periods between the systems. Check your status with the National Insurance Institute before and after the move.
Is there a tax treaty between Israel and Cyprus?
No. As of November 2026 there is no treaty for the avoidance of double taxation between Israel and Cyprus, and Israel does not appear on Cyprus's list of treaties. There is therefore no tie-breaker rule to determine in which country you are resident when both consider you resident, and no reduced treaty withholding rates. Double taxation is avoided only through a foreign tax credit under each country's domestic law. See Israel's tax treaties by country.
What happens on the Israeli side when you move to Cyprus?
In Israel, residency is determined by the centre-of-life test: the permanent home, family, place of work and business, economic interests and social ties. Alongside it are two rebuttable day-count presumptions: presence in Israel of 183 days or more in the tax year, or presence of 30 days or more in the tax year and 425 days or more over the tax year and the two preceding years.
- Residency declaration: someone who meets the day-count presumption but claims not to be an Israeli resident attaches Form 1348 to the annual return.
- Foreign resident: according to PwC, an individual who is not an Israeli resident and stayed outside Israel for at least 183 days in the tax year and the following year, and whose centre of life was not in Israel in the two subsequent years either, is treated as a foreign resident.
- Exit tax: when an individual ceases to be an Israeli resident, exit tax provisions apply to their assets (section 100A of the Israeli Income Tax Ordinance). The implications should be reviewed with an Israeli accountant before the move.
- What remains taxable in Israel: Israeli-source income, such as rent from a property in Israel, salary for work in Israel and certain pensions, remains taxable in Israel even after residency has been ended.
- Foreign company: as long as you are Israeli residents, holding a Cypriot company requires reporting, and it may be treated as a controlled foreign company (CFC) under section 75B of the Israeli Income Tax Ordinance. See the Israel Tax Authority reporting hub.
An Israeli who meets the 60-day rule in Cyprus, but keeps a home, family or an active business in Israel, may be treated as resident in both countries. In the absence of a treaty, each country will tax according to its own law, and the foreign tax credit does not always eliminate the double taxation. If the aim is to benefit from the non-dom regime, the break from Israel must be genuine and documented.
How do the different situations compare?
| Situation | Cypriot tax on dividends and interest from abroad | Cypriot tax on salary | Exposure in Israel |
|---|---|---|---|
| Cyprus resident, non-dom, Israeli residency ended | Exempt from income tax and SDC, subject to the GHS check | At the brackets, with exemptions for new employees | Only on Israeli-source income |
| Cyprus resident, non-dom, still an Israeli resident | Exempt from income tax and SDC, subject to the GHS check | At the brackets | Tax on worldwide income, with a foreign tax credit |
| Cyprus resident who is domiciled (after 17 years) | SDC of 5% on dividends from 2026 profits onwards, and 17% on most interest, unless the paid extension was elected | At the brackets | Depends on status in Israel |
| Not a Cyprus resident | No tax on income from abroad | Only on certain Cypriot-source income | An Israeli resident is taxed on worldwide income |
What do you do in the first year after the move?
- Before the move: review with an Israeli accountant the date of departure, exit tax, holdings in companies and assets remaining in Israel.
- Choose the Cypriot test: 183 days or the 60-day rule, and plan a day calendar that works for both sides.
- Arrange the ties for the 60-day rule: a permanent home, owned or rented, and employment, a business or a directorship of a Cypriot company that continues until the end of the year.
- Register with the Cypriot tax authority and obtain a tax identification number, and apply for non-dom status and evidence it as needed.
- Apply for the new-employee exemption through the employer, where the conditions are met.
- Register for social insurance and GHS when you start working or doing business in Cyprus.
- Provisional tax payments: anyone with income not subject to withholding pays provisional tax in two instalments, on 31 July and 31 December of the same year.
- File an annual return in Cyprus: employees and pensioners by 31 July of the following year, and self-employed persons above a set threshold by 31 January of the second following year.
- File a return in Israel for the year of the move, including Form 1348 where necessary, and request a Cypriot tax residency certificate to support your position.
On ending Israeli tax residency, exit tax and rights on returning to Israel, see the general guide on ending tax residency when moving abroad. The decision on the date of departure and how to report should be made together with an Israeli accountant, before the move and not after it. This guide is general information correct as of November 2026 and is not tax advice. Every move requires an individual review of Cypriot and Israeli law, in coordination with an Israeli accountant and a Cypriot tax adviser.
More on Cyprus: Permanent residence through investment · Golden visas in Europe 2026 · Setting up a company in Cyprus · An Israeli company doing business in Cyprus · Corporate tax and transferring profits to Israel
More on relocating to Cyprus: Residence routes and status in Cyprus · Ending Israeli tax residency · Moving abroad with an Israeli company or business · The family legal checklist
Frequently asked questions
How many days do you need to live in Cyprus to be a tax resident?
More than 183 days in a calendar year, or at least 60 days under the 60-day rule. The 60-day rule also requires not staying more than 183 days in any other single country, working, running a business or serving as a director of a Cypriot company, and maintaining a permanent home in Cyprus.
Does the 60-day rule end my Israeli tax residency?
No. The 60-day rule determines only residency in Cyprus. From 2026 it does not even require that you are not resident in another country. In Israel residency is determined by the centre of life, and in the absence of a treaty there is no rule to decide between the two residencies.
What is non-dom status in Cyprus?
A Cyprus tax resident who is not domiciled there for the purposes of the Special Defence Contribution (SDC). They are exempt from the contribution, so their dividends and interest are almost entirely exempt from Cypriot tax. The status lasts until the individual has been resident for 17 of 20 years.
What changed for non-doms in Cyprus in 2026?
The regime and the 17-year period were kept. An option was added to extend the exemption after 17 years for a one-off payment of EUR 250,000 for each five-year period, for at most two periods, with the approval of the Tax Commissioner.
Is there a tax treaty between Israel and Cyprus?
No, as of November 2026. There is therefore no agreed rule for dual residency and no treaty withholding rates. Double taxation is avoided only through a foreign tax credit under domestic law, so it is important to plan the move in advance.
How much tax does an Israeli retiree who moves to Cyprus pay?
A foreign pension for work outside Cyprus is taxed in Cyprus at 5% on the amount above EUR 5,000 a year, or by election at the ordinary brackets. A pension from Israel may also be taxable in Israel, so the credit mechanism should be checked before the move.
Am I entitled to the 50% salary exemption in Cyprus?
Possibly, if this is your first employment in Cyprus starting after 1 January 2022, your salary exceeds EUR 55,000 a year, and you were not a Cyprus resident for at least 15 consecutive tax years beforehand. The exemption is granted for 17 years, once in a lifetime, and cannot be combined with the other exemptions.
Do I need to pay Israeli National Insurance after moving to Cyprus?
It depends on whether the National Insurance Institute still regards you as an Israeli resident. No social security agreement between Israel and Cyprus was found, so check your status and the implications for your rights with the National Insurance Institute before the move.
Read next · 12 min readCorporate Tax in Cyprus and Transferring Profits to Israel: 15% from 2026, Dividends, Withholding Tax and What Happens in IsraelCyprus corporate tax rose to 15% in 2026: what the reform changed, dividend withholding for Israelis, Israeli dividend tax, CFC rules and director pay.Read the guideSources
- PwC Worldwide Tax Summaries - Cyprus, Individual: Residence
- PwC Worldwide Tax Summaries - Cyprus, Individual: Taxes on personal income
- PwC Worldwide Tax Summaries - Cyprus, Individual: Income determination
- PwC Worldwide Tax Summaries - Cyprus, Individual: Other taxes (social insurance, GHS)
- PwC Worldwide Tax Summaries - Cyprus, Individual: Tax administration
- PwC Worldwide Tax Summaries - Cyprus, Corporate: Withholding taxes (treaty list)
- EY Cyprus - Cyprus Tax Facts
- Andersen Cyprus - Cyprus Tax Reform: comprehensive update effective from 1 January 2026
- PwC Worldwide Tax Summaries - Israel, Individual: Residence
- National Insurance Institute of Israel - International agreements
