Cyprus runs one of the lowest-tax systems in the EU for founders and remote workers. After the 2026 reform, the corporate rate shifted slightly upward, but the Non-Dom dividend structure remains intact and crypto finally has a defined rate.
Here is a structured breakdown of every rate that matters, with no filler.
Corporate Tax: 15%
The corporate income tax rate is 15% on net profits of Cyprus-registered companies (raised from 12.5% in 2026 to align with OECD Pillar Two).
The Notional Interest Deduction (NID) allows a deduction on new equity injected into the company, which can significantly reduce the taxable base — up to 80% of taxable income in favourable cases.
Dividend Tax: 0% (Non-Dom) or 5% SDC (Domiciled)
This is the core of why Cyprus works for founders.
A Cyprus Non-Dom shareholder — one who was not domiciled in Cyprus for at least 17 of the 20 years before becoming resident — pays zero income tax and zero SDC on dividends. The only levy is 2.65% GHS (healthcare) capped at EUR 4,770/year.
Domiciled shareholders (17+ years in Cyprus) pay 5% SDC on dividends — down from 17% in the 2026 reform.
Combined effective rate for a Non-Dom founder: 15% CIT on profits + 2.65% GHS on extracted dividends = roughly 17% on total extracted profits. For founders who minimise salary and take only dividends, the effective rate on total earnings is approximately 5%.
Income Tax: Progressive Bands (2026 Thresholds)
| Band | Rate |
|---|---|
| EUR 0 – 22,000 | 0% |
| EUR 22,001 – 32,000 | 20% |
| EUR 32,001 – 42,000 | 25% |
| EUR 42,001 – 72,000 | 30% |
| Above EUR 72,000 | 35% |
The zero-rate threshold was raised from EUR 19,500 to EUR 22,000 in the 2026 reform. Most founders minimising salary rarely interact with the upper bands.
Bonus: if you take employment in Cyprus earning above EUR 55,000/year and were not a Cyprus resident in the 3 prior years, 50% of your salary is exempt from income tax for 17 years.
Capital Gains Tax: 0% on Most Assets
20% CGT applies only to gains from immovable property located in Cyprus. Everything else — shares, startup exits via share sale, foreign real estate, most financial assets — is taxed at 0%.
This makes Cyprus particularly attractive for founders planning exits and for investors holding equity.
Crypto Tax: 8% Flat Rate (New in 2026)
Before 2026, crypto was a grey area. The reform introduced an 8% flat rate on gains from crypto disposals. For context: France charges 30% on crypto gains, Germany applies capital gains tax at marginal rates, and the UK charges up to 24% CGT. Cyprus at 8% is among the lowest in the EU.
VAT and Social Insurance
VAT is 19% standard rate, with 9% and 5% reduced rates for accommodation, food, books, and similar categories. Registration threshold is EUR 15,600 annual turnover.
Social insurance: 8.8% employee / 8.8% employer (ceiling EUR 62,868). Self-employed pay 16.6% on assessable income. For founders taking minimal salary, social insurance applies only to that salary portion.
Tax Residency Routes
Two routes:
183-day rule: Spend 183+ days per calendar year in Cyprus.
60-day rule: At least 60 days in Cyprus, maintain ties (rental contract or property), no 183-day residency elsewhere, and no other tax residence. Most remote founders use this route.
For EU citizens, the first step after arriving is the Yellow Slip (MEU1) — without it you cannot open a bank account, register a company, or get your Tax ID.
No Inheritance or Wealth Tax
Neither exists. Assets pass to heirs with no Cyprus tax charge.
Quick Reference
| Tax | Rate |
|---|---|
| Corporate tax | 15% |
| Dividends (Non-Dom) | 0% + 2.65% GHS |
| Dividends (Domiciled) | 5% SDC |
| Income tax | 0–35% (zero to EUR 22K) |
| Capital gains | 0% (20% Cyprus property only) |
| Crypto gains | 8% flat |
| VAT | 19% / 9% / 5% |
| Social insurance | 8.8–16.6% (ceiling EUR 62,868) |
| Inheritance / Wealth | 0% — none |
For founders and remote workers, the structure is straightforward: Cyprus company, Non-Dom status, dividends. The Cyprus Non-Dom status page covers qualification criteria and what happens after the 17-year window.
Informational only. Not tax or legal advice. Consult a qualified Cyprus advisor before making any structural or residency decisions.
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