Cyprus tax reform 2026: what actually changed

For twelve years the pitch for a Cyprus company fit on an index card: 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 — so the version of “Cyprus tax” that most of the internet still describes stopped being true overnight. This is what replaced it, and what it means depending on how you actually take money out.

The company rate went up. Almost everything around it got cheaper or simpler.

The headline changes, in one table

Every row is either new or newly certain. 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.

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; those caps were re-based for 2026, not removed. If you pay yourself a salary from your own company, the salary calculator runs the 2026 bands rather than the old ones most tools still use.

Non-dom survived — with a new exit door

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 a fee rather than simply losing it. What non-dom still will not do is worth repeating, because the Russian- and English-language guides blur it constantly: 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% — one rule, voted 22 December 2025, that ended years of “is it capital gains or trading income?” ambiguity. It makes Cyprus one of the first EU jurisdictions with an explicit statutory rate on crypto profit. Both of the old internet answers — “crypto is tax-free in Cyprus” and long essays on pre-reform general principles — are now wrong. 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 on most commercial documents was abolished, taking a small but annoying friction out of ordinary contracting.

Neither makes a headline, but together they remove two of the paper-cuts that made the old system feel older than its rate.

What this changes for you

The reform doesn’t have one verdict — it has yours, and it depends on how you draw income:

• You take dividends as a non-dom owner: almost pure upside. Company profit at 15%, dividends at 0% SDC, only capped GESY 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 honest way to know your number is to run it, not to read a rate. Put your salary-and-dividend split into the tax calculator — it uses the 2026 rules — and if the answer changes a real decision, tell us the situation and we’ll pressure-test it before you commit.