Cyprus Tax Facts

Introducing the EY Cyprus Tax Facts 2026 guide, your essential, up‑to‑date handbook to Cyprus’ tax landscape. This latest edition covers the impact of the recent Cyprus Tax Reform measures effective from January 2026.

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Philippos Raptopoulos
EY Cyprus, Tax & Legal, Head of Tax and Legal Services
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Welcome to the 2026 Cyprus Tax Facts

We are delighted to introduce this year’s Cyprus Tax Facts. With the pace of new tax legislation accelerating, there's an increased risk that taxpayers might be caught unprepared, making a current, detailed guide on Cyprus' Tax and Legal code invaluable. Changes in 2026 include the Cyprus Tax Reform. The new tax reform represents one of the most significant changes in the modern economic history of Cyprus, as it seeks to resolve long standing distortions and restore injustices that had become entrenched over time in the country’s tax system. It constitutes a flagship reform, implemented after two decades of stagnation, aiming to shape a fairer, more modern and more competitive tax framework. This modernising shift lays the foundations for a meaningful redefinition of the country’s economic model, strengthening the sense of social justice through the reduction of tax burdens and the implementation of targeted measures benefiting both citizens and businesses.

The implementation of the reform is expected to facilitate business activity, remove disincentives that for years hindered cross border growth, and enhance the overall competitiveness of the Cypriot economy. At the same time, it aligns with European priorities for recovery and resilience, incorporating principles of sustainability, innovation and social balance.

The tax reform is expected to strengthen Cyprus’ position on the international investment map by shaping a more stable, fair and predictable tax framework. This outcome, however, depends on consistent implementation and long-term strategic planning, making the reform acting as a catalyst for upgrading the Cypriot economy and creating new opportunities for domestic and foreign investment. At the same time, it will reinforce the country’s role as a regional hub for investment and technological development, leveraging its geographical position and human capital, and contributing to the creation of a credible economic ecosystem that supports sustainable growth and Cyprus’ international presence.

This Tax Guide represents hundreds of hours of tax research, all done with our clients in mind. However, it should not be regarded as offering a complete explanation of the tax matters referred to and is subject to changes in the law and other applicable rules. Readers are advised to consult our EY professionals for further information.

We encourage you to subscribe to our monthly TaxLegi Newsletter and Alerts for timely updates on key developments. You may subscribe below to register in our contact database.

 

Download the 2026 Cyprus Tax Facts Guide (EN)

  • An individual who stays in Cyprus for a period or periods exceeding in aggregate 183 days in the year of assessment.

    In addition, the definition of tax resident includes an individual who does not stay in any other state for one or more periods exceeding in aggregate 183 days in the same tax year, provided that the individual cumulatively meets the following criteria:

    • Stays in the Republic for at least 60 days in the year of assessment; and
    • Exercises any business in the Republic and/or is employed in the Republic and/or holds an office for a person tax resident in the Republic which is maintained until 31st December of the year of assessment; and
    •  Maintains a permanent residence in the Republic which is owned or rented by him.

  •

    Taxable income

    Tax rate

    Amount of Tax

    € 0 - 22,000

    0 % 

    € 0

    € 22,001 - 32,000

    20 %

    € 2,000

    € 32,001 - 42,000

    25 %

    € 2,500

    € 42,001 - 72,000

    30 %

    € 9,000

    € Over 72,001

    35 %

    For widows’ pensions which exceed the amount of €22,000, taxpayers may elect for these to be taxed at the rate of 20% or added to other sources of the individual’s income and taxed under the above Income Tax rates applicable for individuals.

  • An individual is considered to be “domiciled in Cyprus” for Special Contribution to the Defence Fund purposes if:

    (i)  irrespective of his domicile of origin, any person that is a resident of Cyprus, as this is defined by the provisions of the Income Tax Law, for at least 17 years out of the 20 years prior to the tax year, is considered as domiciled in Cyprus;

    (ii)  an individual, who was considered as domiciled in Cyprus according to the provisions of sub-paragraph

        (i) is deemed to maintain such domicile status up until the completion of 20 years for which he is not a resident of Cyprus, as this is defined by the provisions of the Income Tax Law.

    Alternative method of imposing SDC

    A non-domicile individual whose 17-year exemption period has elapsed may elect to an alternative method of taxation, by paying a lump sum of €250,000 for 5-year period, subject to the Commissioner of Taxation approval. An application needs to be submitted by June 30, 2026 for periods starting as of 1.1.2026.

  • A Company whose management and control is exercised in Cyprus. In addition, the definition of a Cyprus tax resident company includes companies incorporated in Cyprus, unless an applicable double tax treaty provides otherwise. Companies that have transferred their registered office or legal seat to Cyprus are considered as being incorporated in Cyprus.

  •

    Corporate tax rate 

    15 %
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