Are you considering ceasing your tax residency in Cyprus? Whether you're planning to relocate or just looking to change your tax status, it's important to follow the proper procedures to ensure a smooth transition. Here's a comprehensive guide to help you through the process.
Determine Your New Tax Residency
Before ceasing your tax residency in Cyprus, you must establish residency in another country. This typically involves spending more than 183 days in that country and meeting its specific residency requirements. Ensure you have legal documentation to prove your new residency status.
Cease Employment or Business Activities
If you are employed or running a business in Cyprus, you must terminate these activities. Notify your employer or formally close your business. Collect all relevant termination documents, such as a letter from your employer or business closure certificate.
Settle Outstanding Taxes and Liabilities
Ensure all your tax obligations in Cyprus are settled before you cease your tax residency. This includes paying any outstanding taxes, fines, or penalties. Obtain a tax clearance certificate from the Tax Department to confirm that you have no pending tax liabilities.
Deregister from Social Insurance
If you have been contributing to the Social Insurance Fund in Cyprus, you need to deregister. Inform the Social Insurance Services and complete the necessary forms to terminate your contributions. Keep a copy of the deregistration confirmation for your records.
Close Bank Accounts and Update Financial Records
Close any local bank accounts or update your financial records to reflect your new tax residency status. Notify your banks and financial institutions about your change in residency to avoid any future complications.
Submit a Tax Residency Termination Form
Complete and submit the tax residency termination form to the Cyprus Tax Department. This form officially notifies the authorities of your intention to cease being a tax resident. Attach all supporting documents, such as proof of new residency, tax clearance certificate, and deregistration confirmation.
Legal References
- Income Tax Law 118(I)/2002
- Assessment and Collection of Taxes Law 4/1978
- Special Contribution for Defence Law 117(I)/2002
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