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5.5. Source Rules with Respect to Income Derived by Non-Residents

Non Cyprus tax resident individuals/companies are taxed only on their Cyprus-source income including the following:

  • Employment income or profits (including allowances) from any office or employment in Cyprus. In practice income subject to tax is calculated subject to the days spend in Cyprus.
  • Directors fees for attending board meetings in Cyprus;
  • Income from a permanent establishment in Cyprus,
  • Rental of immovable property located in Cyprus; and
  • Pensions from employment exercised in Cyprus.

Taxation in Cyprus may be reduced under a double tax treaty.

Dividends and interest received by non-residents are exempt from income tax.