Cyprus taxes in 2026: an overview after the tax reform

Checked: 27 October 2026.

Cyprus taxes in 2026: at a glance

A tax reform has been in force in Cyprus since 1 January 2026: a package of amendments to the laws on income tax, tax collection, the Special Defence Contribution and capital gains tax, plus a law abolishing stamp duty. The reform changed most rates and thresholds, so older overviews of Cyprus taxes are now out of date.

The main changes for residents: the income tax-free threshold has risen from €19,500 to €22,000, family deductions have been introduced, the Special Defence Contribution (SDC) on rent has been abolished, and SDC on dividends from new profits has been cut to 5%. The corporation tax rate has risen to 15%, and stamp duty has been abolished.

Below is an overview of taxes for Cyprus residents: who counts as a tax resident, how salaries, dividends, interest, rent and property are taxed, the VAT and contribution rates, and the deadlines for filing returns and paying tax.

Who pays tax in Cyprus

Cyprus tax residents pay income tax on their worldwide income, earned both in Cyprus and abroad. You become resident if you spend more than 183 days in Cyprus in a year or meet the 60-day rule; since 2026 that rule applies regardless of residence in another country.

SDC on dividends, interest and other passive income is paid only by residents who are domiciled in Cyprus; residents with non-dom status do not pay it. As before, you are treated as domiciled in Cyprus if you have been tax resident here for at least 17 of the last 20 years, and since 2026 this status is kept until you have been non-resident for 20 years.

The reform kept non-dom status and added a new option: people who are not domiciled in Cyprus by origin can extend the status by paying €250,000 for a five-year period, no more than twice. Residence and domicile are covered in more detail in a separate article.

Income tax

From the 2026 tax year, income up to €22,000 is tax-free; income from €22,001 to €32,000 is taxed at 20%, up to €42,000 at 25%, up to €72,000 at 30%, and above that at 35%. Up to and including 2025, the tax-free threshold was €19,500 and the 35% rate started at €60,000.

New deductions have been introduced for each parent: €1,000, €1,250 and €1,500 for the first, second and each further dependent child, up to €2,000 for rent or mortgage interest on the main home, and up to €1,000 a year for “green” spending. They are subject to family income limits of €100,000 to €200,000 depending on the number of children, or €40,000 for single people, and apply only if both spouses file their returns on time; home insurance against natural disasters is deductible up to €500 a year with no income test.

For people moving to Cyprus for work, the existing reliefs remain: half of a salary above €55,000 is exempt for 17 years, and for a first job taken up between 26 July 2022 and the end of 2027, 20% of the salary, up to €8,550 a year, is exempt for seven years. Foreign pensions can be taxed at 5% on the amount above €5,000, instead of the previous €3,420.

Dividends, interest and rent

Interest and dividends are exempt from income tax but subject to SDC and General Healthcare System (GHS/GeSY) contributions. SDC on interest stays at 17%, and at 3% on Cypriot and European government savings certificates and bonds.

SDC on dividends paid out of profits for 2026 onwards has been cut to 5%. Dividends from profits up to and including 2025 that are paid by the end of 2031 are still subject to 17%; deemed dividend distribution has been abolished for profits from 2026, but a new 10% contribution applies to disguised distributions, such as private use of company assets.

SDC on rent was abolished from 1 January 2026: rental income is subject only to income tax and GHS contributions, and 20% of the rent is deducted as expenses. Since 1 July 2026, rent for property in Cyprus may be paid only by bank transfer, card or another electronic method. Gains from crypto-assets are taxed at 8%.

Property

Capital gains tax on the sale of property in Cyprus, and of shares in companies that own it, stays at 20%. Since 2026 it also applies to shares in companies that own Cyprus property indirectly, if that property accounts for at least 20% of the share value, rather than 50% as before.

Since 2026 the lifetime exemptions from this tax are €30,000 in general, €50,000 for farmers selling agricultural land and €150,000 on the sale of a main home the owner has lived in for at least five years. The main-home exemption and the general exemption cannot be combined: the larger one applies.

Stamp duty was abolished from 1 January 2026, but documents signed by the end of 2025 are still subject to it. There has been no immovable property tax since 2017, and local charges, such as for refuse collection and sewerage, are set by municipalities and District Local Government Organisations.

Companies, VAT and contributions

Since 1 January 2026 the corporation tax rate has been 15%, up from 12.5%. From the 2026 tax year, self-employed people with turnover up to €120,000 do not need to prepare financial statements; with turnover up to €200,000 and assets up to €500,000, reviewed accounts are enough, and otherwise audited accounts are required.

The standard VAT rate in Cyprus is 19%; reduced rates are 9% for restaurants and hotels, 5% for most food, water and medicines, and 3% for books and newspapers. The zero rate on some basic goods, such as infant formula, nappies and fresh fruit and vegetables, has been extended to 31 December 2027.

Employees and employers each pay 8.8% of salary to the Social Insurance Fund, and the self-employed 16.6%; maximum insurable earnings are €5,742 a month. GHS contributions are 2.65% for employees, 2.90% for employers and 4% for the self-employed, payable on income up to €180,000 a year.

Tax calendar

Self-employed people and those with rental income pay provisional tax in two instalments during the year, by 31 July and by 31 December, and pay the balance with their return. The 2025 return is due by 31 October 2026 through TAXISnet, with no interest or charges if it is filed and the tax paid by 30 November 2026.

Individuals without accounts will file their 2026 return by 31 July 2027, and only through Tax For All. Companies and individuals with accounts now file by 31 January of the second year after the tax year, instead of 31 March.

Since 1 January 2026, interest on overdue tax has been charged at a single rate of 3.5% a year, and failure to pay on time adds a charge of 5% of the amount due, plus a further 5% after two months. The special contributions on salaries for 2011–2016 were abolished back in 2017; the information in this article was checked as of 27 October 2026.

Continue planning

• Cyprus income tax return: deadlines, TAXISnet and tax refunds
• Cyprus tax residency: 60-day and 183-day rules
• Payslip in Cyprus: gross, net and deductions

Official sources

• Tax Department — Tax Reform 2026
• Tax Department — Individual Income Tax Return and tax bands
• Tax Department — presentation: SDC and Capital Gains Tax reform
• Tax Department — presentation: Assessment and Collection of Taxes and Stamp Duty repeal
• CyLaw — Capital Gains Tax Law 52/1980
• Tax Department — VAT rates
• Tax Department — GHS (GeSY) contributions
• Social Insurance Services — contribution rates from 2024

The Cyprus Ministry of Finance in Nicosia · Photo: ΣτηρίζωΚύπρο · CC BY-SA 3.0 · converted to WebP and resized.