Nicosia, Cyprus. Cyprus’ tax reform has moved from design to implementation, shifting attention to how the new framework will affect competitiveness and investment appeal, according to Stavros Stavrou, president of the Cyprus Chamber of Commerce and Industry (Keve). Speaking at the 9th Cyprus International Tax Conference, Cyprus Tax Reform 2026, he said the reform is expected to have a broadly positive economic impact if assessed against real business conditions.
Corporate tax and competitiveness
Stavrou said the market is still absorbing the corporate tax increase, noting Cyprus has adjusted to similar developments in the past, though impacts vary by sector. He said high-margin businesses may absorb the change more easily, while lower-margin sectors such as agriculture and industry may need strategic reassessment.
He added that Cyprus remains competitive despite comparisons with lower-tax jurisdictions. From an operational perspective, he said he does not expect material changes in business models, supply chains or corporate presence, with companies more likely to focus on efficiency improvements and pricing adjustments.
Dividend-related changes
Stavrou pointed to the abolition of dividend distribution accounting rules, describing it as a structural correction benefiting Cypriot shareholders. He said the change reduces administrative burden, improves cash flow and lowers the effective tax burden for local investors, supporting domestic investment strategies.
He also said the reduction in dividend taxation from 17 per cent to 5 per cent directly increases net returns for Cypriot tax residents and shareholders.
Personal taxation measures
Turning to personal taxation, Stavrou said the changes are welcome but that multiple deductions increase complexity. He questioned whether some measures could instead operate as subsidies to keep the system simpler.
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