How corporate tax works in Cyprus
Cyprus tax resident companies are taxed on worldwide income. The standard corporate income tax rate increased from 12.5% to 15% from 1 January 2026.
Gains from selling shares, bonds and other securities are generally exempt from Cyprus corporate income tax, which is one reason Cyprus remains popular for holding companies and investment structures.
Large multinational groups still need to model Pillar Two. Cyprus applies a domestic minimum top-up tax for in-scope groups, and defensive rules can impose 5% or 17% withholding on certain related-company dividends paid to low-tax or EU non-cooperative jurisdictions.
Tax rates at a glance
- Standard CIT
- 15%From 2026
- Domestic minimum top-up tax
- 15%
- Share disposal gains
- 0%
- Dividend WHT
- 0% / 5% / 17%
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
Holding companiesFoundersRegional operatorsInvestorsMNE groups
Watch out for
- { "The 2026 reform changed more than the headline rate": "residence rules, anti-abuse rules, transfer pricing thresholds and crypto taxation all moved." }
- Cyprus generally does not tax dividends or share gains at company level, but certain related-company dividends paid to low-tax or EU non-cooperative jurisdictions can trigger defensive withholding.
- VAT, payroll costs and substance still matter even in a low-tax structure.
Frequently asked questions
What is the corporate tax rate in Cyprus?
The standard corporate tax rate is 15% for tax years starting on or after 1 January 2026.
Are capital gains taxed at company level in Cyprus?
Gains from selling shares and other securities are generally exempt from Cyprus corporate income tax. Property gains follow the separate capital gains tax rules.
Is Cyprus good for holding companies?
Often yes, because Cyprus still has broad share-gain exemptions and no general dividend withholding tax. The main caveats are substance, defensive WHT rules, Pillar Two and VAT.