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The Biggest Tax Overhaul in 20 Years
On December 22, 2025, the Cypriot parliament passed the most comprehensive tax reform in over 20 years. Effective January 1, 2026, it affects corporate tax, income tax, dividend taxation, crypto assets, stamp duty, and tax administration.
Corporate Tax: 12.5% → 15%
Corporate tax rises from 12.5% to 15%, following OECD Pillar Two requirements. Cyprus remains highly competitive with its participation exemption, IP Box (~3% effective), NID, and stamp duty abolition. Loss carry-forward extended from 5 to 7 years, R&D super-deduction (120%) extended to 2030.
This was exactly our experience: The Biggest Tax Overhaul in 20 Years On December 22, 2025, the Cypriot parliament passed the most comprehensive tax reform in over 20 years. Effective January 1, 2026, it affects corporate tax, inc...
– Business owner from Vienna, in Nicosia since 2022
Income Tax: New Brackets and Higher Allowance
Tax-free allowance raised from €22,000 to €22,000. Top rate of 35% now applies from €72,001 (previously €60,000). New brackets: 20% (€22,001-32,000), 25% (€32,001-42,000), 30% (€42,001-72,000).
Dividends, Deemed Dividend and Crypto
SDC on dividends reduced from 17% to 5% (Non-Doms remain 0%). Deemed dividend rule abolished. SDC on rental income abolished. New 8% flat tax on crypto gains. Stamp duty abolished for most transactions.
New Obligations for All Tax Residents
Since 2026, all tax residents aged 25+ must file annual tax returns regardless of income. Rent payments over €500 must be made by bank transfer since July 2026. Document retention: 6 years.
Tax Reform 2026
Topics: The Biggest Tax Overhaul in 20 Years, Corporate Tax: 12.5% → 15%, Income Tax: New Brackets and Higher Allowance
CMC Practical Tip
The Biggest Tax Overhaul in 20 Years On December 22, 2025, the Cypriot parliament passed the most comprehensive tax reform in over 20 years.
Frequently Asked Questions
Most provisions from January 1, 2026. Electronic rent payments over €500 from July 1, 2026.
Yes, since 2026 all tax residents aged 25+ must file annually – even with no taxable income. Deadline: July 31 (electronic).
Absolutely. Total burden has actually decreased for many due to deemed dividend and stamp duty abolition. 15% corporate tax + 0% SDC (Non-Dom) + 0% capital gains on securities remains very attractive.
How CMC Supports You
At CMC Certus Management Consultants, we are here for you – not only for tax and legal questions, but also for all practical topics of everyday life in Cyprus. Our team in Larnaca and Pafos knows the local conditions first-hand.
As your local contact, we handle: company formation and management, tax advisory and Non-Dom applications, ongoing bookkeeping and tax returns, support with authorities, and referrals to estate agents, lawyers, doctors and tradespeople.