Cyprus Tax Reform 2026: What Changed on 1 January 2026, With Before and After Tables and Worked Examples

The Cyprus tax reform took effect on 1 January 2026 and applies from the 2026 tax year. For individuals the 0% band rose from €19,500 to €22,000 and the 35% rate now starts at €72,000 (it was €60,000), which cuts income tax by €985 on a €50,000 salary and by €1,585 on a €100,000 salary. Corporate tax is 15% (it was 12.5%), the Special Defence Contribution on dividends is 5% for profits of 2026 onwards (it was 17%), stamp duty is abolished, and the lifetime capital gains exemption on a main residence rose from €85,430 to €150,000. VAT on new homes keeps its 19% and 5% rates and the Land Registry transfer fee scale is unchanged, so on a €300,000 apartment the abolished stamp duty saves €507.50 while the VAT choice is still worth €42,000. This guide lists each change with its law and date in before and after tables, and works out the effect on two salaries, a company dividend, a property sale and a purchase (sources read on 9 November 2026). The full 2026 rates and take-home pay are in Cyprus tax for individuals.

Cyprus tax reform 2026: the laws, the dates and what applies from when

The reform is a package of laws passed in 2025 and in force from 1 January 2026, plus one VAT change that follows on 1 September 2026. The Tax Department's reform page lists the changes by area, and its explanatory guide states that the individual measures start with the tax year 2026, for which the return is filed in 2027 with a deadline of 31 July 2027. The return for the 2025 tax year, filed during 2026, follows the old rules.

During 2026 an employer applies the new bands to withholding, and employees claim the new deductions on Tax Department form T.F.59. The Tax Department also publishes an income tax calculator for individuals for 2026. A person who needs a tax number first can start with how foreigners get a Cyprus tax ID.

Cyprus income tax rates before and after the 2026 reform

The reform keeps the five-step scale of 0%, 20%, 25%, 30% and 35% and moves every threshold up. The Tax Department's January 2026 presentation shows the two scales side by side.

Chargeable income is the amount after the deductions the law allows, so social insurance, GHS contributions and the other deductions come off first. Because every band is wider, the 35% rate now applies to income above €72,000, which is €12,000 higher than before, and the tax-free band is €2,500 wider. Premiums for insuring a home against natural disasters are deductible up to €500 a year from 2026; the policy side is in our guide to home insurance in Cyprus.

Income tax on €50,000 and €100,000 before and after the Cyprus tax reform

Take a single employee with no other income and no new deductions. Social insurance is 8.8% of salary up to the 2026 cap of €68,904 and GHS is 2.65% of salary; both are deducted before income tax. To show the effect of the new scale alone, the table applies the same contributions to both columns.

The €50,000 case in steps. Social insurance 8.8% × €50,000 = €4,400 and GHS 2.65% × €50,000 = €1,325, so taxable income is €50,000 − €4,400 − €1,325 = €44,275. On the 2026 scale: 0% on the first €22,000, 20% × €10,000 = €2,000, 25% × €10,000 = €2,500 and 30% × €2,275 = €683, which makes €5,183. On the old scale: 0% on €19,500, 20% × €8,500 = €1,700, 25% × €8,300 = €2,075 and 30% × €7,975 = €2,393, which makes €6,168. The difference is €985, and the total burden including contributions is €10,908 in 2026, the same figure as in is Cyprus a tax haven.

The €100,000 case. Social insurance is 8.8% × €68,904 = €6,064 because of the cap, and GHS is 2.65% × €100,000 = €2,650, so taxable income is €91,286. On the 2026 scale: €2,000 + €2,500 + 30% × €30,000 (€9,000) + 35% × €19,286 (€6,750) = €20,250. On the old scale: €1,700 + €2,075 + 30% × €23,700 (€7,110) + 35% × €31,286 (€10,950) = €21,835. The saving is €1,585. The social insurance cap was €66,612 in 2025 and rose with indexation to €68,904 on 1 January 2026, which adds about €202 of contributions at this salary; with the real 2025 cap the 2025 burden was about €30,418, so the actual year-on-year fall is about €1,454.

New personal deductions in the Cyprus tax reform: children, rent, home loan interest and energy

From the 2026 tax year Cyprus residents can claim new deductions, and the Tax Department states they are given only to tax residents. They sit on top of the existing deductions and do not count towards the one-fifth limit that applies to insurance, GHS and fund contributions. The first three have income tests: family gross income of €100,000 (no children, one or two children), €150,000 (three or four children) or €200,000 (five or more), and €40,000 for a single person.

A worked case. A single earner with a salary of €50,000, a spouse with no income, two children under 18 and rent of at least €2,000 a year paid by bank transfer. Family income of €50,000 is within the €100,000 limit. The deductions are €1,000 + €1,250 = €2,250 for the children and €2,000 for rent, a total of €4,250, and they go to the earner because an unused deduction does not pass to a spouse with no income. Taxable income falls from €44,275 to €40,025, and tax on the 2026 scale is €2,000 + 25% × €8,025 = €4,006.25, against €5,182.50 without the deductions. The saving is €1,176.25 a year. The remaining rules, including the carry-forward and how the deduction is claimed, are in the Tax Department's explanatory guide and in Cyprus tax for individuals.

Tax residence, filing duty and non-dom status after the Cyprus tax reform

Three changes affect people who move to Cyprus. First, the 60-day rule: a person qualifies as tax resident by spending at least 60 days in Cyprus, not more than 183 days in any other single state, carrying on a business, being employed or holding a directorship in Cyprus, and keeping a permanent home in Cyprus that is owned or rented. Until 31 December 2025 the person also had to be tax resident in no other country, and from 1 January 2026 that condition is deleted, so a person who is also resident elsewhere can still qualify. The 183-day rule is unchanged. Tax residency in Cyprus explains both rules and the Cyprus tax residency certificate covers the proof.

Second, the filing duty. From the 2026 tax year every Cyprus tax resident aged 25 to 70 files a return even with no income; a resident with no gross income who is under 25 or over 70 does not. A non-resident files if they have Cyprus-source income.

Third, the domicile rules that decide whether the Special Defence Contribution applies. A person without a Cyprus domicile of origin is domiciled after being tax resident for at least 17 of the last 20 years. From 2026 that person keeps the status until 20 years, not necessarily consecutive, have passed in which they were not Cyprus tax resident, and the Tax Department's slides give an example of a person who completed 17 years of residence in 2026, was non-resident from 2027 to 2030 and returned in 2031, who is still treated as domiciled. The new option lets a person with no domicile of origin stay outside the contribution by paying a flat €50,000 a year for a five-year period, renewable for a second period. The application goes to the Commissioner by 30 June of the first year of each period, the €250,000 for the five years is paid by the end of the month after approval, and it is not refunded. The full non-dom picture is in Cyprus non-dom status. The dividend and interest rates are in Cyprus dividend and interest tax.

Dividends, interest and the 15% corporate tax rate after the Cyprus tax reform

A worked case for a company owner who is resident and domiciled. The company earns €100,000 of profit and pays all of it out after tax. Under the old rules, with 2025 profit: corporate tax 12.5% × €100,000 = €12,500, a dividend of €87,500 and Special Defence Contribution 17% × €87,500 = €14,875, a total of €27,375 or 27.4% of the profit. Under the 2026 rules: corporate tax 15% × €100,000 = €15,000, a dividend of €85,000 and contribution 5% × €85,000 = €4,250, a total of €19,250 or 19.3%. A non-domiciled resident pays only the €15,000, which is 15%. GHS of 2.65% on the dividend applies in each case and is left out of these totals. The company tax rate is also placed in context in is Cyprus a tax haven.

Other income tax changes in the 2026 reform: share options, crypto gains and foreign pensions

Stamp duty abolished in Cyprus from 1 January 2026

The Stamp Duty (Repeal) Law 239(I)/2025 repealed the Stamp Duty Laws from 1 January 2026. The Tax Department's presentation states that documents drawn up and signed by even one party up to 31 December 2025 remain liable, so a sale contract signed in December 2025 still carries the old charge even if completion is in 2026. For those documents the Tax Department introduced a new stamping procedure from 1 April 2026, in which the request and payment go through its TaxForAll portal before the document is stamped at a district office.

Up to 31 December 2025 the charge on a Cyprus instrument was nil up to €5,000, 0.15% from €5,001 to €170,000 and 0.2% above €170,000, with a maximum of €20,000 (PwC Worldwide Tax Summaries). Applied to the contract value:

The saving is real and small: €507.50 is 0.17% of a €300,000 price. A cost list that still shows stamp duty describes a charge that does not exist for new contracts; the cost of buying property in Cyprus has the current list.

Capital gains tax exemptions after the Cyprus tax reform

The rate of capital gains tax on Cyprus immovable property stays at 20%. The reform raised the lifetime exemptions and widened the share rule.

Someone who already used exemptions before 2026 can use the extra amount for sales from 2026; the Tax Department's example of a person who used the whole general exemption gives an additional €12,914. A worked case: a second apartment is sold in 2026 with a gain of €80,000 after indexation and costs, and the owner has used no exemption. Under the old exemption the taxable gain would be €80,000 − €17,086 = €62,914 and the tax 20% × €62,914 = €12,582.80. With the €30,000 exemption the taxable gain is €50,000 and the tax is €10,000. The saving of €2,582.80 equals 20% of the extra €12,914. The sale-side taxes are in taxes on real estate in Cyprus.

What the Cyprus tax reform means for buying a €300,000 apartment

For a buyer the reform removes one line, stamp duty, and leaves the two large ones, VAT and transfer fees, as they were. The table prices a €300,000 apartment, taking €300,000 as the price before VAT and as the contract value, with the transfer fee on the statutory scale of 3% to €85,000, 5% to €170,000 and 8% above, halved when the purchase carries no VAT.

The reform changes the new-build total by €507.50, and the choice between 19% and 5% VAT changes it by €42,000. Legal fees, the mortgage registration fee and other costs sit outside the table. The VAT conditions are in Cyprus property VAT explained.

VAT on new homes in Cyprus: unchanged rates and the first-use test from 1 September 2026

The January reform did not change VAT. The standard rate is 19% and the 5% rate for a new residence used as the main and permanent home needs the Commissioner's approval. The 5% rate covers the first 130 m² of buildable area up to a value of €350,000, provided the total transaction does not exceed €475,000 and the area does not exceed 190 m², and the buyer uses the home as the main residence for ten years (PwC Worldwide Tax Summaries). A separate change follows on 1 September 2026.

The effect is that the age of a building does not decide the question alone. A law-firm summary of the regulations reads the new test to mean that a completed unit that has never been used can stay inside the VAT regime however many years have passed, and that a younger unit lived in for 18 months may be past first occupation. The same firm advises care with sales signed or delivered around 1 September 2026. Before comparing a new and a resale price, ask a lawyer to confirm in writing which regime applies to the unit; choosing a property lawyer in Cyprus explains what to ask.

What the Cyprus tax reform did not change

Employee GHS and the position of a newcomer to the national health system are in GESY in Cyprus explained. A move to Cyprus brings these changes together with practical steps, which the moving to Cyprus checklist sets in order.

Not covered above because they concern businesses: the other company-side measures of the reform, such as the seven-year loss carry-forward and the research incentives.

Cyprus tax reform questions people ask

Sources, all read on 9 November 2026. Cyprus Tax Department (gov.cy/mof-tax), Tax Reform 2026 page published 29 May 2026: the explanatory guide for individuals (11 May 2026 edition), the presentation on the individual income tax changes (11 May 2026 edition, first issued January 2026), the Tax Department presentations on Income Tax (Amendment) Law 244(I)/2025, the Special Defence Contribution (Amendment) (No. 4) Law and Capital Gains Tax (Amendment) (No. 3) Law of 2025, Assessment and Collection of Taxes (Amendment) (No. 2) Law 243(I)/2025 and Stamp Duty (Repeal) Law 239(I)/2025, the stamping procedure guide of March 2026, and the VAT rates page. These documents are in Greek and the translation is ours. PwC Worldwide Tax Summaries, Cyprus: individual sections on taxes on personal income, residence and other taxes, and corporate sections on taxes on corporate income and other taxes, for the VAT regulation R.A.A. 102/2026, the stamp duty scale, the transfer fee schedule, social insurance, GHS and the 0.4% levy. LLPO Law Firm, Cyprus VAT and Immovable Property (4 September 2026), for the five-year test and the reading of the first-use rule. Not confirmed on an official page: the text of the regulations in the Official Gazette and any Tax Department circular on the first-use test, and the Department of Lands and Surveys fee page, so the transfer fee scale rests on PwC. Figures are computed from these rates with the assumptions stated in each example. This guide is general information and not tax advice; a licensed tax adviser should confirm your own position. Cyprus VIP Estates assists investors in choosing new developments; legal and immigration advice comes from licensed professionals.