More and more entrepreneurs are considering moving to Cyprus, and that is no coincidence. The island is known not only for its sunny climate and relaxed lifestyle, but also for one of the most favorable tax systems in the European Union.
Cyprus tax offers low rates, a simple system, and the opportunity to fully legally optimize your assets for tax purposes, both as a private individual and as an entrepreneur.
On this page you will find everything:
Comprehensive guides by tax
| Tax | Rate | Explanation |
|---|---|---|
Corporate tax Corporate Income Tax | 15% | Increased from 12.5% as of Jan 1, 2026 — all Cyprus companies |
IP Box regime Intellectual property | 3% eff. | 80% deduction on qualifying IP profit; effectively 20% of 15% |
Income tax Personal Income Tax | 0 – 35% | Progressive; tax-free up to €22,000; top 35% above €72,000 |
Non-Domain Dividend SDC exemption | 0% | GeSY only 2.65% (max €4,770/year); applies 17 years after establishment |
Dividend domiciled Special Defence Contribution | 5% | Reduced from 17% to 5% as of January 1, 2026 |
Real estate capital gains tax Capital Gains Tax | 20% | Cyprus real estate only; exemptions up to €150,000 |
Profit on shares/securities Securities | 0% | Shares and securities are generally fully exempt from CGT |
VAT standard Value Added Tax | 19% | Most goods and services; threshold €15,600 annual turnover |
VAT on first home Reduced rate | 5% | First 130m², max contract value €350,000; new construction by developer |
VAT hospitality / hotels Reduced rate | 9% | Restaurants, accommodation, catering and hospitality |
Inheritance tax Inheritance Tax | 0% | Completely abolished as of January 1, 2000 |
Wealth tax Wealth Tax | 0% | Does not exist in Cyprus |
Crypto profits Digital Assets | 8% | Fixed rate introduced as of Jan 1, 2026; losses only within the same year |
GeSY healthcare GESY Healthcare | 2,65% | Capped at €180,000 income/year; max contribution €4,770/year |
Employee social insurance Social Insurance | 8,8% | Capped at ±€68,904 insured annual salary |
Real estate transfer costs Property Transfer Fees | 3 – 8% | Upon resale; waived if VAT was paid at purchase |
Stamp duty Stamp Duty | 0% | Completely abolished as of January 1, 2026 |
Annual property tax Immovable Property Tax | 0% | Abolished in 2017; only municipal levies (€100–€500/yr) |
Cyprus has a progressive income tax system.
The 2026 tax reform raised the tax-free threshold from €19,500 to €22,000 and adjusted the higher tax brackets.
Taxable income is your gross income minus GeSY contributions and any applicable exemptions. For new residents eligible for the 50% expatriate exemption, half of their Cyprus employment income is kept outside these brackets, which significantly reduces the effective tax rate.
Non-Dom status does not reduce income tax on salary or business profits. What it does do, however, is fully exempt dividends and interest from the Special Contribution for Defence.
→ Comprehensive guide: Cyprus Income Tax
| Taxable income | Rate |
|---|---|
| €0 – €22.000 | 0% |
| €22.001 – €32.000 | 20% |
| €32.001 – €42.000 | 25% |
| €42.001 – €72.000 | 30% |
| Above €72,000 | 35% |
As of 2026, the standard Cyprus corporate income tax rate will have increased from 12.5% to 15%, in line with OECD Pillar Two rules and international tax developments.
Despite this increase, Cyprus continues to offer an attractive business climate, partly due to the retention of important exemptions and incentive measures such as the IP Box regime and the Notional Interest Deduction.
Key features of the Cyprus corporate tax:
→ Comprehensive guide: Setting up a Company in Cyprus
This is where Cyprus becomes exceptional for internationally mobile entrepreneurs.
The SDC rate on actually distributed dividends for companies established in Cyprus and Cyprus resident individuals with Cypriot domicile has been reduced to 5% (previously 17%).
For Non-Dom residents: anyone who has not lived in Cyprus for at least 17 years during the past 20 years—which concerns virtually all foreigners settling on the island—is subject to the SDC exemption on dividend and interest income, regardless of whether it originates from Cyprus or foreign sources.
In practice, a Non-Dom entrepreneur running a Cyprus Ltd pays himself a salary of €22,000 per year and distributes the remaining profit as dividends:
The effective total tax burden on the entire income cycle is typically 12–18%, depending on the structure.
→ Comprehensive guide: Cyprus Income Tax
A capital gains tax of 20% is levied on profits from the disposal of real estate located in Cyprus or the disposal of shares in companies that directly own real estate located in Cyprus.
Important exemptions:
For most internationally mobile entrepreneurs and investors, the zero-rate treatment of share sales is the most relevant rule; profits from the sale of corporate shares are generally tax-free in Cyprus.
→ Comprehensive guide: Cyprus Capital Gains Tax (coming soon)
The standard VAT rate in Cyprus is 19%. Three reduced VAT rates apply: 9%, 5%, and 3%, in addition to a zero rate.
The VAT registration threshold is an annual turnover of €15,600. Entrepreneurs below this threshold can register voluntarily.
→ Comprehensive guide: Cyprus VAT (coming soon)
| Rate | applicable to |
|---|---|
| 19% | Standard rate — most goods and services |
| 9% | Restaurants, hotels, accommodation, hospitality |
| 5% | First home (first 130m², max €350,000); home renovation |
| 3% | Books, newspapers, medicines |
| 0% | Export, certain financial services |
There is no inheritance tax in Cyprus. Cyprus does not levy tax on inheritances; this was abolished as of January 1, 2000. This is one of the most direct advantages of Cyprus for wealth planning and estate structuring.
The only costs involved in the transfer of inherited real estate are transfer fees to the Land Registry, which vary from 0% between parents and children to a maximum of 8% for unrelated parties.
Between spouses and third-degree relatives, the rate is 0.1%.
→ Comprehensive guide: Inheritance tax Cyprus (coming soon)
A flat income tax rate of 8% has been introduced on profits from crypto asset transactions, as well as on rewards from approved employee share schemes. This applies to both individuals and corporations.
Losses from crypto disposals can only be offset against crypto gains within the same tax year; they cannot be carried forward to subsequent years.
However, a 0% rate applies to crypto if you are a “Hodler” and do not actively trade.
→ Comprehensive guide: Cyprus Crypto Tax
Real estate transactions in Cyprus involve several possible taxes, depending on whether the property is new or second-hand and whether it is for personal or business use:
→ Comprehensive guide: Buying Real Estate in Cyprus
The combination is rare, even within the EU: a competitive corporate tax rate, a Non-Dom regime that exempts dividend income for 17 years, no inheritance tax, no wealth tax, 0% capital gains tax on share sales, and an extensive network of double taxation treaties.
Most competing jurisdictions offer one or two of these features: Cyprus offers them simultaneously, within a fully compliant EU legal framework.
The 2026 tax reform reinforced this position. Although the nominal corporate tax rate rose from 12.5% to 15%, the reform simultaneously abolished the deemed dividend distribution, reduced the dividend tax for domiciled shareholders from 17% to 5%, introduced a clear 8% crypto framework, and raised the exemption thresholds for capital gains tax.
The net result for most internationally mobile persons is a system that is simpler, more transparent, and just as attractive as before.
Want to know if moving to Cyprus and optimizing your taxes is an option for you? At Cyprus-Consult, we help people every day with:
Relevant information
Any questions? Feel free to ask us!
Technically, no. Cyprus is a fully OECD-compliant EU member state with automatic exchange of financial information. It is not on any blacklist. The term “tax haven” implies opacity and artificial structures — Cyprus offers something different: low statutory rates that are transparent, legal, and fall within the EU framework. The Non-Dom regime, the 0% on share sales, and the 15% corporate tax rate are simply Cypriot tax law, available to every qualifying resident.
That depends heavily on your structure. A salaried employee with an income of €40,000 per year pays roughly €3,600 in income tax and €1,060 in GeSY — an effective rate of approximately 12%. An entrepreneur running a Cyprus Ltd with Non-Dom status, taking a salary of €22,000, and distributing dividends typically sees a total effective tax burden of 12–18% over the entire income cycle. Use the Cyprus Take-Home Calculator for your specific scenario.
Non-residents only pay tax on income from Cyprus. Residents pay tax on their worldwide income, but the Non-Dom regime ensures that dividends and passive income from abroad are exempt from SDC during the first 17 years of Cyprus residency. Cyprus tax residency can be obtained with just 60 days of presence per year via the 60-day rule.
Cyprus has no inheritance tax, no wealth tax, no gift tax (between close relatives), no capital gains tax on share sales, no annual property tax, and — since 1 January 2026 — no stamp duty. Nor is there withholding tax on dividends paid to non-residents, except to low-tax or blacklisted jurisdictions.
Yes. The Cypriot tax system is fully transparent, complies with all EU directives and OECD standards, and participates in automatic information exchange. The benefits stem from Cypriot tax law itself — not from payouts or opaque structures. Naturally, you must also comply with the regulations of your home country, particularly regarding the emigration itself. You can read more about this in our guide on exit tax and emigration tax.
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