Last Updated on 14th October 2025
Double tax treaties are hugely important when it comes to expat tax planning, because they exist to ensure individuals aren’t taxed twice on the same income or asset in two countries.
However, tax treaties aren’t always automatically applied, and it’s essential that the right reliefs and offsets are claimed to avoid unnecessarily overpaying, or inadvertently breaching a tax regulation.
In the latest in our series of FAQs exploring tax treaties in some of the destinations most popular with expats, we’ve collated this guide to focus on Cyprus.
What Is the UK’s Double Tax Treaty With Cyprus?
The double tax treaty (DTT) between the UK and Cyprus was updated in 2018 and outlines the rules governing the taxation of foreign nationals from either jurisdiction in the other. It is a comprehensive agreement that sets out things like how and where incomes, pensions and capital gains are taxed.
How Does the UK-Cyprus Tax Treaty Define a Tax Resident?
DTTs provide conditions and tiebreakers that show how expats should be classified. If they are tax residents, they are subject to tax on their worldwide income and assets in that location, whereas non-tax residents pay local taxes only on their domestic income.
In most cases, the Cypriot DTT rules categorise foreign nationals as tax residents if they spend 183 days or more a year in the country.
There is also a statutory test that classifies expatriates as tax residents if they spend over 60 days in Cyprus and meet other conditions, including not being a tax resident in any other country, and having a permanent home in Cyprus.
Will I Need a Certificate of Residency to Claim Cypriot Tax Treaty Benefits?
Yes, you’ll require a document called a Tax Residence Certificate or TRC to claim withholding rates or tax reliefs provided for in the DTT.
Expats must be registered with the tax office, have no outstanding tax liabilities, and be up to date with their returns to apply for a TRC using either Form TD126 or Form TD156A, which they should submit to the Cypriot Ministry of Finance.
Does the Cypriot Tax Authority Tax My Worldwide Income?
If you are deemed a tax resident, then yes, you’ll typically be taxed in Cyprus on all your taxable earnings. However, the DTT provides exemptions and credits that expats can use to avoid double taxation.
We’d recommend speaking to an experienced adviser if you’d like to know how a specific foreign-sourced income will be taxed, because the DTT dictates the exact rules about where certain types of earnings are taxable, which can differ between capital gains, pensions, employment income and dividends.
What Withholding Rates Does the Cypriot Double Tax Treaty Apply Against UK Expat Incomes?
Withholding rates refer to taxes paid to the authorities at the point of income, rather than a tax that is calculated at the end of the tax year and then payable. DTTs set out withholding rates for specific types of income and often provide reduced tax rates for foreign-sourced income.
The Cyprus DTT with the UK states, for example, that British expats can opt to have their overseas pensions taxed according to the progressive income tax bands, or to pay a flat rate of 5% on all pension income over €3,420.
What Happens if I Have a UK-Based Pension and Pay Tax at Source?
DTTs are designed to remove issues around duplicate taxation, so if you have a pension or another income source where tax is automatically deducted before you receive the income, you’ll need to claim a tax credit.
The exception applies to UK government pensions, which are only taxed in the UK and are not exposed to taxation in Cyprus.
I Work Remotely or Split My Time between Cyprus and the UK, Where Will My Employment Income Be Taxed?
Remote and hybrid working has become increasingly common, and the principles of the DTTs remain applicable. That means that, usually, your employment income will be taxed in the location where you are considered a tax resident according to the DTT rules.
This can change from year to year if you don’t have a permanent home in either country, or if you divide your time equally. That means you can’t verify your tax residency position once and assume this will remain the case over the long term.
How Can I Claim Tax Treaty Benefits as an Expat Living in Cyprus?
Your financial adviser can provide personalised guidance depending on your circumstances, but you’ll usually need to:
- Apply for a Tax Residence Certificate (TRC), which we’ve touched on in question three
- Submit documentation showing that you are the ‘beneficial owner’ of an asset or income source
- Complete the withholding relief paperwork
- Provide evidence of your residency status if there is any ambiguity about where you are a tax resident
Beneficial ownership is a key aspect of DTTs, because tax authorities need evidence of this to ensure a person claiming treaty benefits is the genuine ‘owner’ of an income or asset, and isn’t claiming credits or exemptions as part of a tax avoidance scheme.
Are There Any Common Mistakes Expats Make When Claiming Against the Cyprus/UK Tax Treaty?
Yes, and this is why we always recommend consulting a professional adviser with in-depth knowledge of DTTs and how they work. The most frequent error we encounter is when a person attempts to claim DTT benefits for an income source where they cannot demonstrate they are the beneficial owner, or don’t know what this means, and haven’t collated the necessary documentation.
Other mistakes include missing filing deadlines, which can result in being ineligible for retrospective tax credits or allowances, and misunderstanding which income should be declared in which country.
What Happens if an Expat Is a Citizen of a Country Without a Tax Treaty With Cyprus?
We’ve focused on the UK/Cypriot DTT here, but if you are a citizen elsewhere and that country doesn’t have a DTT, your tax exposure will depend on the unilateral tax rules in each place.
Cyprus or your original home country may still grant tax credits or exemptions if you’ve already paid tax overseas against an asset or income, but this can be variable since there won’t be a formal DTT that sets out how each taxable event is treated.
Further Advice About Cypriot Tax Treaties
Should you have any questions we’ve not featured here or need more information about any of the responses we’ve provided, you are welcome to contact the Chase Buchanan Private Wealth Management team in Cyprus at any time. Alternatively, you’ll find several downloadable guides covering key information about residency and taxes for Cypriot foreign national residents.
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Chase Buchanan Insurance Services, Agents & Advisors is authorised and regulated by the Cyprus Insurance Companies Control Service with License No 6883 and offers services in the EU on a cross-border basis as per the provisions of the Insurance Distribution Directive (IDD).
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*Information correct as at October 2025
