Cyprus has one of the most tax-efficient systems in Europe for individuals, but the benefits do not apply automatically. You must be properly registered, file returns on time, and actively make use of the exemptions to which you are entitled.
We offer comprehensive individual tax services for expats, new residents, homeowners, retirees, and international professionals in Cyprus.
Questions or comments regarding how best to arrange everything, or do you need to talk?
Cyprus taxes individuals based on tax residence, not nationality.
If you are a tax resident of Cyprus, you are taxed on your worldwide income. If you are not a resident, you are only taxed on income generated in Cyprus.
You become a tax resident of Cyprus based on one of the following two rules:
Both routes lead to full tax residence in Cyprus, but the implications for your planning differ depending on your income profile.
We assess which route applies to your situation and advise you accordingly.
After the Cypriot tax reform of 2026, the income tax rates for individuals are as follows:
| Annual taxable income | Tax rate |
|---|---|
| €0 – €22,000 | 0% |
| €22,001 – €36,000 | 20% |
| €36,001 – €60,000 | 25% |
| €60,001 – €72,000 | 30% |
| Over €72,000 | 35% |
Cyprus has a progressive tax system: higher rates apply only to the portion of income that exceeds a certain threshold.
If you earn €50,000, only the income above €36,000 is taxed at 25%. Income below that is taxed at the lower rates.
The non-resident scheme is the cornerstone of personal tax planning in Cyprus for foreigners. Non-residents of Cyprus are fully exempt from the Special Defence Contribution (SDC) on dividend and interest income from any source worldwide, for up to 17 years from the date they become tax residents.
In concrete terms: if you receive dividends from a company you own, interest from savings, or passive investment income, as a non-resident you pay 0% tax on all this income. Residents pay 5% SDC on dividends starting in 2026.
However, non-resident status is not granted automatically. This requires a formal application to the Cypriot tax authorities, supporting documentation, and confirmation that you meet the qualification criteria.
Most expats moving to Cyprus are eligible from the start, provided they have not been tax residents of Cyprus for more than 17 of the past 20 years and were not born with a Cypriot domicile of origin.
Starting from the 2026 tax year, all Cypriot taxpayers aged 25 to 71 are required to file an annual income tax return, regardless of their income or whether tax is due. This is a significant change from the previous rules, under which individuals with an income below the tax-free threshold were not required to file a return.
All declarations are submitted electronically via the TAXISnet portal – the official online system of the Cypriot tax authorities.
| Obligation | Deadline |
|---|---|
| Annual income tax return (TD1) | July 31 following the tax year |
| First provisional tax installation | July 31 of the current tax year |
| Second provisional tax installation | December 31 of the current tax year |
| SDC on foreign dividends/interest | Aligned with annual return from 2026 |
| GHS contributions (self-employed) | Quarterly |
All persons generating income in Cyprus (including non-residents and non-residents with income from Cyprus) are required to contribute to the General Health Care System (GHS).
The GHS rates apply to all types of income:
The GHS contributions are capped at an annual contribution limit. They are listed in your annual tax return and, for employees, withheld via payroll administration.
Are you moving to Cyprus, are you already living there and unsure about your obligations, or do you want to review your current tax position?
Then the right time to take action is before the next tax year, not afterwards.
We review your income profile, residency status, the conditions for a non-resident residence permit, and the applicable exemptions in a single session, and give you a clear picture of what you do and do not have to pay.
Relevant information
Any questions? Feel free to ask us!
From the 2026 tax year onwards, yes. All taxpayers in Cyprus aged between 25 and 71 must file an annual income tax return, regardless of their income. Even if your income is zero or below the tax-free threshold of €22,000, you must still file a return.
The TD1 declaration must be submitted electronically via TAXISnet before 31 July of the year following the relevant tax year. For the 2025 tax year, the deadline is 31 July 2026.
You are eligible if you are a tax resident of Cyprus and have been so for no longer than 17 of the past 20 years, and if you were not born with a Cypriot domicile of origin. Most foreign nationals moving to Cyprus are immediately eligible. Non-resident status must be formally applied for; it is not granted automatically.
As a non-resident of Cyprus, you pay 0% dividend tax and 0% income tax on dividend income from Cypriot and foreign companies. This is the main benefit of the non-resident scheme and makes Cyprus one of the most efficient jurisdictions in the EU for dividend income.
Foreign pensions are taxed at a flat rate of 5% on amounts exceeding €3,420 per year. The first €3,420 is fully tax-free. You can also choose to have the standard progressive income tax applied if this results in a lower tax assessment, although this is rarely the case.
If you are a new tax resident of Cyprus, your employment income exceeds €55,000, and you were not resident in Cyprus for at least 15 years prior to the start of your employment, you are likely eligible for the exemption. The exemption must be properly applied for and documented. We advise you on the conditions and guide you through the application as part of our tax planning service.
A penalty of €100 per month (or part thereof) is imposed until the return is filed, with a maximum of €200. Interest is also calculated on unpaid tax. Filing late is easy to avoid – and is one of the most common reasons why clients turn to us for an avoidable expense.
If you are a tax resident of Cyprus, you are taxed on your worldwide income. However, Cyprus has double taxation treaties with more than 60 countries, as a result of which foreign taxes paid on income that is also taxable in Cyprus can generally be deducted from your tax liability in Cyprus.
Moreover, non-residents benefit from exemptions for passive income from abroad.
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