Taxes in Cyprus
The Cyprus tax system works differently from many other countries in Europe. Some taxes do not exist at all. Others are kept low. And under the Cyprus Non-Dom Regime, new residents get a tax benefit that few other EU countries offer. This page gives you a full overview of taxes in Cyprus in 2026: income tax, Non-Dom, capital gains, dividends, pensions, the special defence contribution, crypto, property, VAT, corporate tax and social insurance.
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Table of Contents
- Cyprus Income Tax 2026: Rates and Tax-Free Allowance
- Cyprus Non-Dom Status
- Capital Gains and Securities: No Tax on Shares and ETFs
- Inheritance and Gift Tax: Does not exist
- Dividends and Withholding Tax
- Foreign Pensions: 5% Flat Tax from EUR 5,000
- Special Defence Contribution
- Cryptocurrencies and Taxes: 8% Flat Rate from 2026
- Property: Capital Gains Tax and Allowances on Sale
- Value-Added Tax: 19% Standard Rate and Reduced Rates
- Corporate Tax 2026: 15% and IP Box Regime
- Social Insurance and GESY / GHS Cyprus
- Taxes in Cyprus: Get Individual Advice Now
- Frequently Asked Questions
Cyprus Income Tax 2026: Rates and Tax-Free Allowance
Cyprus taxes income in steps: the more you earn, the higher the rate. Since the 2026 reform, the first EUR 22,000 you earn each year is tax-free. You pay no income tax below this amount.
Here are the tax bands:
| Annual income | Tax rate |
| 0 to EUR 22,000 | 0% |
| 22,001 to EUR 32,000 | 20% |
| 32,001 to EUR 42,000 | 25% |
| 42,001 to EUR 72,000 | 30% |
| From EUR 72,001 | 35% |
Here is an example. On an income of EUR 40,000 a year, you pay EUR 4,000 in income tax. The first EUR 22,000 is tax-free. The part from 22,001 to EUR 32,000 is taxed at 20 percent (EUR 2,000). The part from 32,001 to EUR 40,000 is taxed at 25 percent (another EUR 2,000).
| Income band | Rate | Tax in EUR |
| 0 to EUR 22,000 | 0% | 0 |
| 22,001 to EUR 32,000 | 20% | 2,000 |
| 32,001 to EUR 40,000 | 25% | 2,000 |
| Total income tax | 4,000 |
Profits from trading securities and gains from cryptocurrency follow their own rules. We cover these below. You can also use our Cyprus tax calculator to work out your own figures.
Cyprus Non-Dom Status
Cyprus gives new residents a tax status that few other EU countries offer: the Cyprus Non-Dom Status. Non-Dom is short for "Not Domiciled". It applies to people who are tax-resident in Cyprus but are not permanently domiciled there in the legal sense. This difference matters a lot for tax.
In short: under Non-Dom Regime, you pay no income tax and no special defence contribution on dividends and interest in Cyprus. Regardless of whether the income comes from Cyprus or from abroad.
Dividends from an international company, interest on a foreign bank account, payouts from foreign funds: all of this stays tax-free under this status. It does not matter if you remit the funds to Cyprus or any bank account abroad.
The Non-Dom Status lasts at least 17 years from your first year as a tax resident in Cyprus, and it can be extended after that. You become tax-resident in Cyprus if you spend at least 60 days on the island in the calendar year and meet the other legal requirements.
With Non-Dom status, your worldwide dividends and interest are exempt from both the Special Defence Contribution and income tax — for up to 17 years of Cyprus tax residence. More on this at What is Non-Dom? and Cyprus Non-Dom and Taxes.
Capital Gains and Securities in Cyprus: No Tax on Shares and ETFs
Cyprus charges no tax on gains from selling shares, bonds, ETFs and other securities. This is true for private individuals and for Cyprus companies. The holding period, how often you trade and where the securities come from do not matter.
Property in Cyprus is the one exception: gains from selling Cyprus land and buildings follow separate rules, which we cover in the property section. More on this at Cyprus capital gains and trading.
Inheritance and Gift Tax in Cyprus – Does not exist
In Cyprus, inheritances and gifts are tax-free — no inheritance tax, no gift tax and no general wealth tax, whatever the amount.
If you move to Cyprus from another country, your home country's tax law may still apply in some cases — for instance, if assets or heirs remain there. It's best to have your own situation reviewed.
Dividends and Withholding Tax in Cyprus: What Shareholders Need to Know
Non-resident shareholders of a Cyprus company usually receive their profit payouts with no withholding tax taken off. Cyprus does not withhold tax on dividends paid to people who live abroad. The same is true for interest and royalty payments.
If you live in Cyprus with Non-Dom status, your dividends are free of income tax and SDC — only the 2.65% GESY contribution applies. If you are domiciled in Cyprus, a reduced SDC rate of 5% has applied since 2026 (down from 17%) on dividends paid out of current profits.
How the income is taxed in your home country depends on the double taxation treaty between Cyprus and that country. You can find a full overview at Cyprus double taxation treaties.
Foreign Pensions in Cyprus: 5% Flat Tax from EUR 5,000
Pension income from abroad follows a simple rule in Cyprus. The first EUR 5,000 a year is tax-free. On the amount above that, you pay a flat rate of 5 percent. As an option, you can instead add the pension to your total yearly income and pay the normal income tax rates. This is usually better when your other income is low and your average tax rate is below 5 percent.
If the double taxation treaty sets different rules, those rules apply. Which country may tax your pension under the treaty between Cyprus and your home country is best checked for your own case. More on this at Cyprus double taxation treaties.
Special Defence Contribution in Cyprus: Who Is Affected?
Not every taxpayer in Cyprus pays this contribution. It applies only to people who are both tax-resident in Cyprus and permanently domiciled there in the legal sense. This usually happens only after many years on the island. People who arrive from abroad and hold Non-Dom Status do not pay it at all.
For those who do pay it, a rate of 5 percent has applied since 2026 on dividends that are actually paid out, down from 17 percent before. Interest income is still taxed at 17 percent. Interest from certain government bonds and listed corporate bonds is taxed at a lower rate of 3 percent. Since 1 January 2026, the contribution no longer applies to rental income, which is now taxed only under the normal income tax and a GESY contribution of 2.65% applies.
The Deemed Dividend Distribution rule used to treat kept-back profits as if they had been paid out. This rule has been removed for profits from 2026 onwards. More on this at Cyprus Non-Dom and taxes.
Cryptocurrencies and Taxes in Cyprus: 8% Flat Rate from 2026
The 2026 tax reform brought in a special rule for gains from cryptocurrency. Gains from selling, exchanging or gifting cryptocurrencies, as defined under the EU MiCA Regulation, are taxed at a flat rate of 8 percent. This rule applies whether or not you have Non-Dom Status.
You can only offset losses within the same tax year. You cannot carry them forward to later years. Income from mining cryptocurrencies is not covered by the 8 percent rule and is taxed at the normal income tax rates. NFTs do not count as cryptocurrencies under MiCA. More on this at Crypto and taxes in Cyprus.
Property in Cyprus: Capital Gains Tax and Allowances on Sale
Property in Cyprus is taxed at a capital gains tax of 20 percent when you sell it. But there are allowances, and the 2026 reform raised them a lot: EUR 150,000 is tax-free on the sale of your main home, EUR 30,000 on other property sales and EUR 50,000 on farmland. These allowances apply once over your lifetime.
Gains from selling property abroad are not taxed here. A transfer tax applies when you buy property in Cyprus. The 2026 reform removed stamp duty for most types of contract. It now applies only in certain areas, such as property, banking and insurance.
Value-Added Tax in Cyprus: 19% Standard Rate and Reduced Rates
The standard Cyprus VAT rate is 19 percent. Lower rates apply to certain sectors: 9 percent for hotels and accommodation, and 5 percent for selected food, books and medicines. Healthcare, education and postal services are free from VAT.
If you run a business, you usually have to register for VAT once your turnover reaches EUR 15,600 a year.
Corporate Tax in Cyprus 2026: 15% and IP Box Regime
Since 1 January 2026, the Cyprus corporate tax rate is 15 percent. Before that, it was 12.5 percent. The tax applies to the worldwide profits of a Cyprus company. The special 8 percent rate also applies to a company's gains from cryptocurrency.
Gains from trading securities are free from corporate tax. For income from patents, copyright-protected software and other qualifying intellectual property, the IP Box regime applies: 80 percent of qualifying profits are deducted, which brings the effective tax rate down to 3 percent.
Shareholders who live in Cyprus and hold Non-Dom Status can usually take the after-tax profits as a dividend without paying any extra income tax or special defence contribution in Cyprus. More on this at Non-Dom Status and taxes.
Social Insurance and GESY / GHS Cyprus: Contributions for Employees and Self-Employed
If you live and work in Cyprus, you pay into Cypriot social insurance. Employees and employers each pay 8.8 percent on insurable income, up to a cap of EUR 62,868 a year. Self-employed people pay 17.9 percent up to the same cap.
On top of this comes the payment for the state healthcare system, GESY / GHS Cyprus. Employees and employers each pay 2.65 percent of gross salary, up to a cap of EUR 180,000 a year. With this payment, you can use the public healthcare system and pay much lower fees for treatment. More on this at Cyprus social insurance and at GESY / GHS Cyprus health insurance.
Taxes in Cyprus: Get Individual Advice Now
Which of these taxes apply to you depends on your own situation. Where does your income come from? Do you hold shares in companies? Do you plan to move your home fully to Cyprus? Our team advises private individuals and businesses around the world on these questions, with many years of practical experience.
Frequently Asked Questions on Taxes in Cyprus
You become tax-resident in Cyprus in one of two ways. Under the 183-day rule, you spend more than 183 days on the island in the calendar year. Under the 60-day rule, you spend at least 60 days on the island and meet the other Non-Dom Status conditions, in particular paid work or business activity in Cyprus and a home on the island.
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