Tax system in Cyprus
Cyprus taxes resident individuals on worldwide income, but the 2026 reform lifted the tax-free threshold to EUR 22,000 and widened the bands. Nonresidents are taxed only on specific Cyprus-source income.
The country still has no net wealth tax and no inheritance tax, while dividend and interest planning now matters more because the 2026 reform reduced Special Defence Contribution on dividends to 5% for profits earned after 1 January 2026 and abolished SDC on rents. Cyprus also keeps 19% VAT, payroll social insurance and GESY contributions.
For companies, the big headline is the 15% corporate tax rate from 2026, alongside a broad exemption for share disposal gains and a separate 20% capital gains tax on Cyprus immovable property and property-rich companies.
Tax rates at a glance
- Income tax
- 0% - 35%Progressive
- Wealth tax
- 0%
- Inheritance tax
- 0%
- Capital gains tax
- 20%
- Corporate tax
- 15%
- Dividend tax
- 0% / 5%
- VAT
- 19%
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
FoundersInvestorsRemote workersHigh earnersHolding companies
Watch out for
- Cyprus is not tax-free. VAT, social insurance, GESY, land transfer fees and payroll reporting still matter.
- The 2026 reform changed core rates and thresholds, so pre-2026 and post-2026 income should be treated separately.
- Cyprus also tightened anti-abuse and low-tax-jurisdiction rules, so cross-border structures need substance and treaty checks.
Frequently asked questions
Is Cyprus a low-tax country?
Yes, Cyprus is low-tax by EU standards, but not tax-free. The main 2026 headline rates are 15% corporate tax, 0% - 35% personal income tax and 20% capital gains tax on Cyprus immovable property.
Does Cyprus have wealth or inheritance tax?
No. Cyprus does not levy a net wealth tax or inheritance tax.
What else should I check besides income tax?
Check VAT, payroll social insurance, GESY, dividend rules, capital gains tax on property, stamp duty, land transfer fees and the 2026 tax reform changes.