· Tax Advisory · 4 min read
Cyprus Non-Dom and GESY: What Healthcare Contributions You Owe
Non-dom status does not exempt you from GESY contributions. Here is exactly what you pay on dividends, employment income, and rental income — and why the cap makes it very manageable.
The Cyprus General Healthcare System — GESY (Γενικό Σύστημα Υγείας) — was introduced in 2019 and provides universal healthcare coverage for all Cyprus residents. As a Cyprus resident, including non-domiciled tax residents, you are required to contribute to GESY on your income.
This is one of the questions that most frequently comes up during non-dom planning: “If I’m a non-dom and pay 0% on dividends, do I still pay GESY?”
The short answer is yes — but the amounts involved are modest, and there is a contribution cap that limits your maximum exposure.
GESY Contribution Rates
GESY contributions are levied as a percentage of various income categories. For Cyprus residents (including non-doms), the rates from January 2020 are:
| Income Type | Resident Rate |
|---|---|
| Employment income (employee) | 2.65% |
| Employment income (employer contribution) | 2.90% |
| Self-employment income | 4.00% |
| Dividend income | 2.65% |
| Interest income | 2.65% |
| Rental income | 2.65% |
| Pension income | 2.65% |
Non-dom status exempts you from SDC (Special Defence Contribution) — the 17% levy on dividends and 30% on interest. It does not exempt you from GESY.
The Annual Cap — The Key Number
GESY contributions are capped. The cap applies to each individual income category separately, based on a maximum taxable income of €180,000 per year.
This means:
- GESY on dividends: maximum 2.65% × €180,000 = €4,770/year
- GESY on interest: maximum 2.65% × €180,000 = €4,770/year
- GESY on rental income: maximum 2.65% × €180,000 = €4,770/year
- GESY on employment income: maximum 2.65% × €180,000 = €4,770/year (employee portion)
If you receive €1 million in dividends, you still only pay €4,770 in GESY. If you receive €5 million in interest income, you still pay no more than €4,770 in GESY on that interest.
This cap is why non-dom planning works so well even with GESY: the maximum total GESY exposure across all income categories combined is capped per category, making the total burden very predictable.
Practical Examples
Example 1: Founder with €500,000 Dividend Income
| Item | Amount |
|---|---|
| Dividends received | €500,000 |
| SDC (non-dom exemption) | €0 |
| GESY on dividends (2.65% × €180,000 cap) | €4,770 |
| Cyprus income tax on dividends | €0 |
| Total Cyprus tax on dividends | €4,770 (0.95% effective rate) |
Compare to what this founder would pay in the UK (dividend tax at 39.35% above £500): approximately €197,000 in UK tax on the same income.
Example 2: Founder with €200,000 Dividends + €50,000 Interest
| Income | GESY |
|---|---|
| €200,000 dividends | 2.65% × €180,000 = €4,770 (capped) |
| €50,000 interest | 2.65% × €50,000 = €1,325 (below cap) |
| Total GESY | €6,095 |
The interest income is below the €180,000 cap, so GESY is levied on the full €50,000. Total GESY across both income categories: €6,095 for the year.
Example 3: Founder with Employment + Dividends
A founder who is both employed by a Cyprus company and receives dividends:
| Income | GESY |
|---|---|
| Salary: €60,000 | 2.65% × €60,000 = €1,590 (employee) |
| Dividends: €400,000 | 2.65% × €180,000 = €4,770 (capped) |
| Total GESY | €6,360 |
The employer also pays GESY at 2.90% on the salary: €1,740. But this is a company expense, not a personal burden.
Does GESY Give You Anything in Return?
Yes. GESY provides full public healthcare coverage in Cyprus, including:
- GP and specialist visits
- Hospital treatment (public and participating private hospitals)
- Prescribed medications (partially subsidised)
- Outpatient and inpatient care
For €4,770 per year in contributions, a high-dividend non-dom receives comprehensive healthcare access. Most high-net-worth individuals in Cyprus supplement this with private health insurance (€1,500–€5,000/year for comprehensive cover), but GESY provides a solid foundation.
Is GESY a Deductible Expense?
Employee GESY contributions are partially deductible for Cyprus income tax purposes. However, since non-dom individuals do not pay income tax on dividends or interest anyway, the deductibility is only relevant for employment income where Cyprus income tax applies.
The employer’s GESY contribution (2.90%) is a deductible business expense for the Cyprus company.
Changes to GESY Over Time
GESY rates have been stable since the system’s full launch in 2020. There is no indication of significant rate changes in the short term. The system is funded by contributions from all income categories across Cyprus, and the cap structure provides certainty for planning purposes.
Summary
If you are a Cyprus non-dom receiving significant dividend income, GESY is a minor, predictable cost. The maximum annual GESY on dividend income is €4,770, regardless of how much you receive. This compares to zero dividend tax (SDC exemption) and zero income tax on dividends.
For financial planning purposes, budget €4,770/year per income category (dividends, interest, rental income separately) to cover GESY contributions — with a total maximum that is fixed by the €180,000 cap per category.
Back to Non-Dom overview → | How to get Cyprus tax residency →
Have questions about your specific GESY exposure? Contact ConsiderCyprus for a personalised assessment.
