Cyprus Tax Guide 2026
The first year of the widest tax reform Cyprus has seen in over twenty years — explained in plain language.
On 22 December 2025 the House of Representatives voted a package of six amending laws, published in the Official Gazette on 31 December 2025 and effective, in the main, from 1 January 2026. Corporation tax moved to 15%. The tax-free personal allowance rose to €22.000. The defence contribution on dividends fell from 17% to 5%. Deemed dividend distributions and stamp duty were abolished. And the tax authorities were given considerably stronger collection and enforcement powers.
Our Tax Guide 2026 sets out the whole system as it now stands — not only what changed, but everything a business or an individual needs in one place.
What is inside
- Part 1 — Individuals. Residence and domicile, the new bands, exemptions for people relocating to Cyprus, the household deductions, defence contribution, capital gains and social insurance.
- Part 2 — Companies. Corporation tax, deductions, capital allowances, losses, the notional interest deduction, the intellectual property box, the end of deemed distributions, withholding taxes, transfer pricing, anti-avoidance and Pillar Two.
- Part 3 — VAT, property and transaction taxes, including the rules on buildings that took effect on 1 September 2026.
- Part 4 — Compliance, covering the new filing calendar, penalties, interest and the enforcement powers introduced this year.
- Ten appendices — rates, allowances, the treaty table with notes, the 2026 tax calendar, penalties and a glossary.
Worth reading even if you know the headlines
- Dividends paid out of pre-2026 profits still carry 17% if received by the end of 2031 — the order in which reserves are distributed now matters.
- Two deemed distributions remain: on 2024 profits at 31 December 2026, and on 2025 profits at 31 December 2027.
- Rent on Cyprus property paid otherwise than electronically is no longer deductible.
- Private use of company assets is now taxed as a disguised dividend at 10%.
- Transfer pricing documentation thresholds have risen, but the Summary Information Table is filed whatever the amounts.
- A page of key figures near the front holds every rate, threshold and deadline on one sheet.
The guide opens with Why Cyprus — the tax and non-tax reasons that bring people and businesses here, including the non-domicile exemption, EU passporting of financial services licences, and what headquartering here actually involves.
Download the Cyprus Tax Guide 2026 (PDF, 57 pages)
Written for everyone who deals with Cyprus tax — business owners, finance staff, property owners, employees and newcomers — not only for specialists. It is general guidance, not advice on your own position. We would be glad to discuss what the reform means for you: info@philippouauditors.com.