Anyone who deals with taxes in Cyprus quickly encounters a multitude of individual topics – corporate tax, Non-Dom status, dividends, tax residency and more. This guide orders the most important building blocks, shows the central rates for 2026 and leads to the in-depth articles for each topic.
The tax system in Cyprus is among the most attractive in the European Union. It combines low rates with legal certainty, a dense network of double-taxation treaties and special regimes that specifically address internationally mobile entrepreneurs and the wealthy. This guide gives a structured overview of taxes in Cyprus and points to the detailed specialist articles on each individual topic.
Taxes in Cyprus – the key figures for 2026
For the year 2026, some central figures apply to taxes in Cyprus that shape every plan. The following overview summarises them:
- Corporate tax15% (since 1 Jan 2026, previously 12.5%)
- Income tax0% up to €22,000, progressive to 35%
- Non-Dom status17 years' exemption from the Special Defence Contribution
- Dividends (Non-Dom)only 2.65% GHS, otherwise tax-free
- Capital gains on securities0%
- Inheritance and gift taxnone
The increase of corporate tax to 15% on 1 January 2026 took place in the course of the global minimum taxation (OECD Pillar Two). Despite this adjustment, Cyprus remains a low-tax location by European comparison. The details and all further changes are dealt with by the article taxes in Cyprus 2026.
The Non-Dom status as the centrepiece
The most important instrument in the area of taxes in Cyprus for individuals is the Non-Dom status. Anyone who becomes resident in Cyprus without being domiciled there is exempt for up to 17 years from the Special Defence Contribution on dividends and interest. On dividends, only a capped contribution to the GHS health system of 2.65% arises. Capital income can thus be collected largely tax-free. How it works, the conditions and the extension beyond the 17 years possible from 2026 are explained by the article Non-Dom status in Cyprus.
Tax residency: when does one count as liable to tax?
The precondition for using the favourable taxes in Cyprus is tax residency. Cyprus has two routes: the classic 183-day rule and the particularly attractive 60-day rule for mobile entrepreneurs. How to establish tax residency in Cyprus and what the 60-day rule attaches to in detail are dealt with extensively by the respective articles.
Corporate taxation and dividends
At company level, taxes in Cyprus are shaped above all by the corporate tax of 15% and the treatment of dividends. Distributed profits are, for Non-Doms, effectively subject only to the GHS contribution; the withholding tax on distributions abroad is 0%. For capital gains from securities, the capital gains tax of 0% applies – a tax on disposal gains arises only on Cyprus property.
Taxes in Cyprus at a glance
| Type of tax | Rate / rule |
|---|---|
| Corporate tax | 15% |
| Income tax | 0% up to €22,000, then 20–35% |
| Dividends (Non-Dom) | 2.65% GHS, otherwise exempt |
| Capital gains (securities) | 0% |
| Withholding tax on foreign dividends | 0% |
| Inheritance/gift tax | none |
| VAT | 19% |
The individual areas of taxes in Cyprus work together. The Non-Dom status unfolds its effect only with a clean tax residency, and a holding structure is efficient only if the distribution routes are well thought out. Anyone who considers the building blocks in isolation forgoes potential. A holistic plan that connects the personal and entrepreneurial levels is therefore decisive.
International connections and double taxation
For German-speaking clients, taxes in Cyprus are inseparably linked to the relationship with the home country. The double-taxation treaty Germany–Cyprus governs which state may tax which income and avoids the double burden. Anyone moving away from Germany must also observe German exit taxation – a topic that belongs in the planning early.
Special types of income: crypto and no inheritance tax
Two further building blocks round off the picture of taxes in Cyprus. Gains from cryptocurrencies are treated favourably under certain conditions; the details are explained by the article crypto tax in Cyprus. And for wealth succession it is of outstanding importance that Cyprus levies no inheritance tax – wealth can pass tax-free to the next generation.
All information in this guide refers to the legal position in 2026. Tax law is dynamic; before every decision, the current legal situation should be checked. The linked detailed articles are kept at the same level.
How the building blocks interact
A typical overall picture of taxes in Cyprus looks like this: an individual establishes tax residency via the 60-day rule, uses the Non-Dom status for tax-free capital income and holds their operating business or their participations via a Cyprus company. Profits are taxed at 15%, distributions flow in almost tax-free, and wealth succession takes place without inheritance tax. This interplay makes Cyprus interesting for entrepreneurs, investors and the wealthy alike – provided the structure is underpinned with genuine substance and cleanly implemented.
This is precisely where the work of a family office begins: it brings the individual tax building blocks together into a coherent, robust overall concept and coordinates them with the legal structure and succession planning.
Taxes in Cyprus: entrepreneurs and individuals
With taxes in Cyprus, it is worth distinguishing two perspectives that are closely connected in practice. At the level of the individual, income tax with its high allowance of €22,000, the Non-Dom status for capital income and the absence of inheritance tax are in the foreground. At the level of the company, the corporate tax of 15%, the participation exemption and the withholding-tax exemption on foreign dividends shape the picture. The greatest effect arises when both levels are brought together: a Cyprus company generates profits that are taxed at 15% and distributes them to a shareholder who, as a Non-Dom, pays almost no further tax. This interplay is the actual core of a well-considered arrangement.
For the self-employed and freelancers, there is also the fact that new residents can, under certain conditions, benefit from a temporary income-tax exemption – 50% for higher incomes over several years. This relief can considerably lower the effective burden in the initial phase and should be included in the planning.
Common misconceptions about taxes in Cyprus
Around taxes in Cyprus, persistent misunderstandings hold on. A widespread error is the assumption that the mere registration of a residence or the formation of a company is enough to enjoy the low rates. In fact, both tax residency and the recognition of a company require genuine substance and an actual relocation. A second error concerns the Non-Dom status: it exempts capital income but not employment income or profits from active activity, which are taxed regularly. A third error is the notion that with the move all ties to the home country are automatically cut – in fact, exit and CFC rules can continue to operate if the relocation is not cleanly carried out.
Anyone who knows these misunderstandings avoids costly false assumptions and approaches the arrangement realistically from the outset.
The path to a legally secure structure
A viable use of taxes in Cyprus arises not through individual measures but through a coordinated overall concept. At the start is the analysis of the personal and entrepreneurial starting position: which income is earned, which participations exist, where the family lives, which goals are pursued? Building on this, the structure is designed – residence, tax residency, Non-Dom status and, where applicable, a company – and coordinated with the departure from the home country. Only the clean implementation and the ongoing maintenance of the structure secure the advantages permanently. Precisely this bringing-together of the individual parts is the task of a holistic advisory approach that connects tax, legal and personal aspects.
Taxes in Cyprus: the system at a glance
Anyone who deals with taxes in Cyprus encounters a system that combines low rates with EU membership and legal certainty. Corporate tax has been 15% since 2026 and thus follows the global minimum-tax standard but remains attractive by EU comparison. Income tax is progressive: up to €22,000 income remains tax-free, above which graduated rates of up to 35% apply. There is no inheritance and no gift tax, and VAT is 19%.
The 2026 reform
The tax reform that came into force on 1 January 2026 modernised the system: corporate tax rose from 12.5% to 15%, the basic allowance for income tax was raised to €22,000, the Special Defence Contribution on rents was abolished and stamp duty fully abolished. The core advantages – Non-Dom status, tax exemption of securities gains, no inheritance tax – were retained.
- Corporate tax15% (since 2026)
- Income tax0% up to €22,000, then up to 35%
- Securities gains0%
- Inheritance/gift taxnone
- Crypto8% (Art. 20E ITL)
- VAT19%
Non-Dom as the core of the tax advantages
The centrepiece of taxes in Cyprus for new arrivals is the Non-Dom status. It exempts dividends, interest and rental income over a period of 17 years from the Special Defence Contribution; only the capped contribution to the GHS health system arises. Combined with the general tax exemption of securities gains, an environment arises in which capital income remains largely unburdened.
Capital gains and crypto
Gains from the sale of securities are tax-free in Cyprus; the Capital Gains Tax of 20% concerns only Cyprus property and shares in predominantly property-holding companies. For crypto gains, a separate framework with a rate of 8% has applied since 2026. This clear, low treatment of capital and crypto income is an essential building block of taxes in Cyprus.
Tax residency and treaties
The advantages require Cyprus tax residency, which is established via the 183-day or the 60-day rule. A broad network of double-taxation treaties reduces withholding taxes on cross-border income and avoids double taxation. Anyone who wishes to use taxes in Cyprus should establish residency robustly and also consider the effect in the country of origin – such as exit taxation.
The attractiveness of taxes in Cyprus arises from the interplay of corporate tax, the Non-Dom status, the freedom from capital-gains tax and the absence of inheritance tax – not from a single rate. A sensible assessment considers the overall picture in relation to the personal situation.
Income tax in detail
Income tax is a core element of taxes in Cyprus. It is structured progressively: income up to €22,000 remains tax-free since the 2026 reform, above which graduated rates apply that rise step by step to 35%. The raised basic allowance relieves middle incomes in particular. For qualified new arrivals with higher incomes, there is also an exemption of part of the employment income, which promotes the arrival of specialists and entrepreneurs.
Rental income is subject to the progressive tariff after a flat-rate deduction; the formerly levied Special Defence Contribution on rents was abolished in 2026, so that only the GHS contribution is added.
| Tier | Treatment |
|---|---|
| up to €22,000 | 0% |
| above | graduated to 35% |
| Rental income | progressive after a flat-rate deduction |
| SDC on rents | abolished |
Corporate taxation
With taxes in Cyprus for companies, several instruments complement the corporate tax of 15%: a notional interest deduction on equity, which lowers the burden on self-financed growth; a loss carry-forward extended to seven years; and an increased deductibility for research and development expenditure. Together with the participation exemption and the IP Box, a powerful framework arises for operating companies and holdings.
Crypto and capital gains in detail
A modern aspect of taxes in Cyprus is the treatment of crypto gains. Since 2026 a separate framework with a rate of 8% has applied to these, capturing the disposal, exchange, payment and gift of crypto assets. Losses can be offset in the same year; a carry-forward is not provided for; mining is to be considered separately. This clear rule creates legal certainty for a previously uncertain area.
For classic securities, the general tax exemption of disposal gains remains. The Capital Gains Tax of 20% concerns only Cyprus property and shares in predominantly property-holding companies, with the allowances raised in 2026.
With the favourable crypto taxation of 8% too, clean documentation of the transactions is important. The correct recording of acquisition, disposal and losses is the basis for the appropriate tax treatment.
Establishing tax residency correctly
The basis of all advantages of taxes in Cyprus is correctly established tax residency. It arises via the 183-day rule or the more flexible 60-day rule, which, besides a minimum presence, requires a permanent home and an activity in Cyprus, provided there is no competing residency in another state. On application, the tax authority issues a residency certificate, which is needed for the application of the double-taxation treaties.
Without robust residency, neither the Non-Dom status nor the other advantages apply. The clean establishment and documentation of residency therefore stands at the beginning of every arrangement.
The tax advantages in Cyprus require actual and provable tax residency. A mere registration is not enough. Anyone who establishes and documents residency robustly secures the basis for all further advantages.
Conclusion
Taxes in Cyprus offer an attractive overall package in 2026: 15% corporate tax, a progressive income-tax tariff with a high allowance, the Non-Dom status for almost tax-free capital income, 0% on securities gains and no inheritance tax. The advantages unfold, however, only in interplay and with clean implementation. This guide offers the overview; the linked articles go into each topic at the necessary depth.
This article serves general information only and does not constitute individual tax, legal or investment advice. All tax information refers to the 2026 legal footing in Cyprus and may change. Florian Wilk is a Director and not a tax adviser; technical tax and structural work is carried out by the CMC team and cooperating law firms.