Cyprus inflation reaches 4.4% as tax consultation and new airline routes announced

Nicosia, Cyprus. Cyprus recorded annual inflation of 4.4 per cent in July 2026, ranking jointly third-highest in the European Union, according to figures released on Wednesday by Cystat and Eurostat. The country has also opened a consultation on minimum tax rules for large groups, while Cyprus Airways announced new routes from Larnaca.

Inflation above EU average

The Harmonised Index of Consumer Prices rose by 4.4 per cent compared with July 2025 and increased by 0.7 per cent between June and July, according to the Cyprus Statistical Service.

Eurostat data showed Cyprus shared the EU’s third-highest annual inflation rate with Bulgaria. Only Romania, with 8.2 per cent, and Lithuania, with 5.4 per cent, recorded higher rates.

Cyprus’ inflation rate was above the EU average of 3.0 per cent and the euro area average of 2.9 per cent.

Minimum tax consultation

Cyprus has opened a public consultation on proposed changes to its minimum tax rules for large multinational and domestic business groups.

The consultation concerns amendments to legislation implementing the global minimum tax framework known as Pillar Two and will remain open for comments until September 5, 2026.

The proposed changes follow observations by the European Commission during its review of Cyprus’ incorporation of relevant EU rules into national law.

The legislation implements the EU directive on ensuring a global minimum level of taxation for multinational enterprises and large domestic groups, as amended by a further EU directive adopted on December 14, 2023.

The Pillar Two framework requires large multinational and domestic groups with annual revenue exceeding €750 million to face a minimum effective tax rate of 15 per cent.

Cyprus Airways network expansion

Cyprus Airways announced that it will introduce year-round direct flights from Larnaca to Rome and Munich from December.

The airline will also increase its weekly flights to Heraklion from late October.