Progressive Income Tax 0-35% — Cyprus
Cyprus employment and business income taxed progressively. First €22,000 tax-free (2026 tax reform). Top rate 35% only on income above €72,000. Competitive rates. Combined with Non-Dom benefits on investment income creates complete package.
Progressive Income Tax 0-35%
Cyprus employment and business income taxed progressively. First €22,000 tax-free (2026 tax reform). Top rate 35% only on income above €72,000. Competitive rates. Combined with Non-Dom benefits on investment income creates complete package.
Tax Brackets 2026
First €22,000 completely tax-free. Very generous allowance. About €1,833/month tax-free income.
€10,000 in this bracket. If taxable income is €32,000: pay 20% × €10,000 = €2,000 total tax.
€10,000 in bracket. Marginal rate system - only income in bracket taxed at 25%.
€30,000 in bracket. Reasonable rate for higher earners by EU standards.
Top rate 35% only on excess over €72,000. Lower than many EU countries (UK 45%, France 55%). Maximum effective rate ~30-32% for high earners.
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Non-Dom Status - 17 Years Tax Advantage
Non-Domiciled status is Cyprus's premier tax benefit. Provides 0% tax on dividends and interest for 17 years. Exempt from Special Defense Contribution. Combined with 0% capital gains creates ultimate tax-efficient regime for investors and business owners.
0260-Day Tax Residency Rule
Cyprus offers easiest tax residency in EU: just 60 days physical presence. Much lower than standard 183 days. Perfect for high-earners wanting EU residency without living full-time. Game-changer for international tax planning.
04Cyprus Tax Reform 2026: What Changed
A major tax reform took effect in Cyprus on 1 January 2026 after Parliament approved it on 22 December 2025. The tax-free threshold rose from €19,500 to €22,000, the 20–35% bands moved up, and new deductions arrived for children, rent or mortgage interest and energy efficiency. For investors, SDC on dividends fell from 17% to 5%, deemed dividend distribution was abolished and crypto gains are taxed at a flat 8%. Corporate tax rose from 12.5% to 15%.
05Investment Income - Dividends, Interest, Capital Gains
Cyprus is paradise for investment income. Non-Doms: 0% dividends, 0% interest. Everyone: 0% capital gains on securities; crypto gains taxed at a flat 8% from 2026. No other major EU country offers this combination. Why wealthy investors flock to Cyprus.
06Corporate Tax & IP Box
15% corporate tax from 2026 (12.5% until 2025). IP Box: 80% exemption = 3% effective rate on IP income. Extensive treaty network. No WHT on dividends out. Premier holding company jurisdiction.