Cyprus tax reform 2026: what actually changed

Until the end of 2025 the core Cyprus numbers were 12.5% corporate tax, a €19,500 personal tax-free band and non-dom for the dividends. On 1 January 2026 most of those numbers changed at once. Parliament voted the reform on 22 December 2025 and it was published in the Official Gazette on 31 December 2025. This is what replaced the old rules, and what it means depending on how you take money out.

The headline changes, in one table

Read together, the company rate went up and almost everything around it got cheaper or simpler.

Companies pay more at the top, less on the way out

The corporate rate rose 2.5 points, to 15%. Taken alone that is a tax increase. But the same law cut the dividend Special Defence Contribution for domiciled owners from 17% to 5% and abolished deemed distribution, the old charge on profits you didn’t pay out.

For an owner who distributes, the combined company-plus-dividend cost of getting profit into a pocket is lower than under the old 12.5% + 17% arithmetic. The rise bites hardest on companies that retain large profits and never distribute. Even they gained the seven-year loss carry-forward and the end of deemed distribution.

People with a salary keep more of the first €22,000

The personal income tax now starts at zero up to €22,000 (raised from €19,500), then runs 20% / 25% / 30% and tops out at 35% above €72,000. The band lift is modest in euros but real, and it stacks with the reliefs that were kept, including the 50% exemption for a first high-earning employment in Cyprus. Salary still carries social insurance and GESY. The GESY base stays capped at €180,000 a year, unchanged by the reform, and the social insurance ceiling was updated for 2026. If you pay yourself a salary from your own company, the salary calculator runs the 2026 bands.

Non-dom stays, and can now run past 17 years

Non-domiciled status is the reason many founders are tax-resident in Cyprus, and its core is unchanged: 0% SDC on dividends and interest. The reform added one thing: after the seventeen-year clock runs out, you can now extend non-dom for €250,000 per five-year period, up to two periods, rather than simply losing it. What non-dom still does not do: it does not reduce tax on salary, on trading profit or on crypto, and it does not switch off the GESY health levy. The detail sits on the non-dom page.

Crypto finally has a number

Cyprus now taxes profit from crypto-asset transactions at a flat 8%. The rule, voted on 22 December 2025, ended years of uncertainty over whether crypto profit was a capital gain or trading income. The mechanics, and what still isn’t settled about the young regime, are on the crypto tax page.

Two abolitions that quietly help

• Deemed distribution is gone for 2026-onward profits. The old rule taxed retained profits as if distributed; removing it rewards companies that reinvest.
• Stamp duty was abolished from 1 January 2026, so ordinary contracts no longer carry it.

What this changes for you

How the reform affects you depends on how you draw income.

• You take dividends as a non-dom owner: a small increase. Company profit is taxed at 15% instead of 12.5%, and your dividends were already at 0% SDC, so only the capped GESY sits on top.
• You take dividends as a domiciled owner: the 17%→5% cut usually outweighs the 2.5-point company rise.
• You pay yourself a salary: the €22,000 band and kept exemptions help at the low end; social insurance and GESY are unchanged in structure.
• You retain and reinvest: the higher rate stings most here, softened by the end of deemed distribution and longer loss relief.

The way to know your number is to run it. Put your salary-and-dividend split into the tax calculator, which uses the 2026 rules. If the answer changes a real decision, tell us the situation and we will check it against your facts.