One of the first things people hear about Cyprus is that dividends are tax free under non-dom status. That is true. But it is not the full picture — and being upfront about it actually makes Cyprus look better, not worse.
What is GESY?
GESY is the General Healthcare System — Cyprus's national health fund. It launched in 2019 and gives residents access to public healthcare across the island. It is funded through small contributions from income, including dividends.
The contribution rate on dividend income is 2.65%. But the key detail is the annual cap: no matter how much you receive in dividends, your total GESY contribution is capped at €4,770 per year.
What does that look like in practice?
Say you pay yourself €300,000 in dividends from your Cyprus company. Under non-dom status, income tax is zero. GESY is 2.65% of €300,000 — which would be €7,950 — but the cap kicks in and you pay €4,770. That is it. Your total tax burden on €300,000 of dividend income is €4,770.
For comparison, a founder in Germany or Denmark pulling €300,000 in equivalent income would typically pay €100,000 or more in combined taxes.
Does GESY apply to other income types?
Yes. The 2.65% contribution applies across passive income sources — dividends, interest, and foreign rental income. The €4,770 annual cap applies to your total contributions across all of these combined. So if you have multiple income streams, you still hit the ceiling quickly.
If you take a salary from your Cyprus company instead of dividends, different GESY rates apply — and salary also attracts income tax, which is why most structured clients use dividends as their primary extraction method.
What about crypto?
Crypto disposals in Cyprus are taxed at a flat 8% rate under Article 20E of the 2026 Income Tax Law reform. Whether GESY applies on top of that is a question the tax authorities have not yet definitively clarified under the new rules. We are monitoring this closely and will update this article once there is official guidance. For now, the 8% flat rate is what you plan around.
The bottom line
Dividends in Cyprus are not technically zero cost — but €4,770 per year is as close to zero as it gets at any meaningful income level. You also get access to a functioning healthcare system in return. For anyone paying 40–55% in their home country, this is not a caveat. It is just a rounding error.
If you want to understand how your specific income structure would look under the Cyprus non-dom regime, get in touch. We will map it out with you.