In Cyprus, you pay 0% income tax up to €22,000. The top rate of 35% only applies above €72,000, and even then only on the portion above that.
By comparison: in Belgium, you fall into the 50% bracket starting at €49,840, while in the Netherlands, you start at the 49.5% bracket at €78,426. This is the core of why entrepreneurs, freelancers, and pensioners move to Cyprus.
Below are the complete tax brackets for 2026, calculation examples, and the difference compared to what you currently pay at home.
0% up to €22,000, then rising from 20% to 35%. The 2026 tax reform increased the tax-free threshold from €19,500 to €22,000 and shifted the top bracket from €60,000 to €72,000.
These are the rates on your taxable income:
| Taxable income | Rate | Tax in this bracket (max) |
|---|---|---|
| €0 – €22.000 | 0% | €0 |
| €22.001 – €32.000 | 20% | €2.000 |
| €32.001 – €42.000 | 25% | €2.500 |
| €42.001 – €72.000 | 30% | €9.000 |
| above €72,000 | 35% | — |
These rates apply to everyone who is a tax resident of Cyprus, regardless of nationality.
No. This is by far the biggest misunderstanding. The system is progressive: each rate applies only to the portion of your income within that bracket.
If you earn €80,000 taxable, you pay 35% only on the €8,000 above €72,000, not on the full €80,000. Your first €22,000 always remains tax-free, regardless of your total income.
As a result, your effective (average) rate is always substantially lower than your marginal rate.
Tip: Although income taxes are lower than in many countries, they are still quite high. Therefore, we recommend working on a low salary and distributing dividends 2, 3, or 4 times a year.
Do you want to know what your net income is in Cyprus, including your home country's rules?
In a free 15-minute consultation, we map out your situation.
Four scenarios from our own client practice, from freelancer to expat CEO.
Scenario 1: Freelancer, €35,000 taxable. 0% up to €22,000, 20% on the next €10,000 (€2,000), 25% on the last €3,000 (€750). Total: €2,750, an effective rate of 7.9%.
Scenario 2: Entrepreneur paying themselves a salary of €50,000. €2,000 + €2,500 + 30% of €8,000 (€2,400). Total: €6,900, effectively 13.8%.
Scenario 3: Expat executive, €120,000 salary with the 50% exemption. Half remains unaffected, so you tax €60,000: €2,000 + €2,500 + 30% on €18,000 (€5,400) = €9,900 on €120,000. Effective rate: 8.25%.
Scenario 4: Non-domesticated individual withdrawing income as a dividend. 0% income tax on dividends. You only pay 2.65% GHS, capped at €4,770/year. This is why entrepreneurs often structure their compensation as dividends rather than salary.
For comparison: what do you pay at home now? A taxable income of €50,000 costs you approximately €18,000-€19,000 in personal income tax in Belgium, including municipal tax (marginal ~53.5%), around €16,000-€17,000 in Box 1 in the Netherlands, and €12,000-€13,000 in Germany.
In Cyprus: €6,900. The same income, a third of the tax.
Cyprus has the highest tax-free allowance and the highest starting point for the top rate of the four.
This is the contrast that does the work:
| Land | Tax-free | Top rate | From | NB |
|---|---|---|---|---|
| Cyprus | €22.000 | 35% | €72.000 | non-dom: 0% on dividends/interest |
| The Netherlands | ~€0 (tax credit) | 49,5% | €78.426 | + Box 3 on assets |
| Belgium | €10.910 | 50% (~53.5% incl. municipality) | €49.840 | + municipal tax |
| Germany | ~€12.000 | 45% (42% starting from ~€68k) | ~€278.000 | + soli / church tax |
Your taxable income is your gross income minus your GHS contributions, social security contributions, and allowed deductions. Therefore, you do not pay income tax on your full gross income.
This is part of it:
Deductions. Contributions to social insurance, GHS, an approved pension or provident fund, and life insurance premiums are deductible, together up to a maximum of 1/5 (20%) of your taxable income. Donations to approved causes are fully deductible.
GHS (GESY) is separate from your income tax. Employees pay 2.65% on their gross income, self-employed persons 4.70%, capped at an income of €180,000. This also applies to non-doms; there is no exemption.
Exemptions for new residents. Do you earn more than €55,000 from employment in Cyprus and were you not a tax resident for 15 of the 20 preceding years? Then 50% of your salary is exempt for 17 years (Article 8(23A)). This is the strongest leverage for high earners.
Filing obligation 2026. Starting from tax year 2026, everyone aged 25 to 71 with taxable income must file a return via the Tax For All (TFA) portal, even if you do not owe any tax.
What falls outside these brackets? Dividends and interest fall under SDCs (not subject to income tax), foreign pensions can be taxed at a 5% flat, and crypto disposals fall under a separate 8% flat tax.
These are never added to your salary income.
You become a tax resident via either the 183-day rule or the 60-day rule.
The 60-day rule is Cyprus's unique selling proposition compared to Portugal and Malta: you only need to be on the island for 60 days a year, provided you are not a tax resident anywhere else, do not stay in one other country for 183 days, and have a home plus an economic ties (job, business, or directorship) in Cyprus.
Only as a tax resident do the brackets above apply to your worldwide income.
You now know the discs.
The next step is knowing what they mean for *your* income, structure, and home country. That is exactly what the Cyprus Roadmap does: a personal step-by-step plan with feasibility, home country rules, possible structures with risks, and timing.
You can use the document to brainstorm with your accountant, which will save you consultancy hours later.
Cyprus information
Progressive from 0% to 35%: 0% up to €22,000, 20% up to €32,000, 25% up to €42,000, 30% up to €72,000, and 35% above. The top rate applies only to the portion above €72,000.
€22,000 per year, increased from €19,500 in the 2026 reform. Up to that amount, you pay no income tax, regardless of your total income.
As a tax resident of Cyprus, you are in principle liable for tax on your employment and business income. However, dividends and interest fall under the non-dom exemption (0%), and double taxation treaties prevent you from paying twice.
No. Non-dom exempts you from SDC on dividends, interest, and rent. On salary and business profit, you simply pay the standard tax brackets. For salary, the 50% expat exemption (above €55,000) is the relevant leverage.
You can have a foreign pension taxed at a flat rate of 5% on the amount exceeding €5,000, or under the standard tax brackets if that is more advantageous. More about pension tax →
From 2026, everyone between the ages of 25 and 71 with taxable income must file a tax return via the TFA portal, even without tax due.
On €50,000 in taxable income, you pay €6,900 in Cyprus, compared to €16,000-€19,000 in the Netherlands/Belgium. The exact amount depends on your structure and home country; calculate it during a free consultation.
Yes. GHS (GESY) is the healthcare contribution of 2.65% (employees) or 4.70% (self-employed), capped at €180,000 in income. It is separate from income tax and also applies to non-domestics.
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