Tax reform guide
Cyprus Tax Reform 2026 ENACTED
Cyprus Parliament approved the reform on 22 December 2025; the laws were published in the Government Gazette on 31 December 2025 and generally apply from 1 January 2026.
Sources: KPMG Cyprus reform summary | PwC Cyprus tax reform analysis | Demetriades Law CGT update | Cyprus Tax Department
Key Changes From 1 January 2026
The reform updates corporate tax, personal tax bands, SDC, capital gains, compliance rules and selected incentives.
Corporate Tax Changes
- Corporate Tax Rate:
12.5%-> 15% - Tax Loss Carry-Forward: Extended from 5 to 7 years
- DDD Rules: Abolished for profits earned from 2026 onwards, with transitional rules for older profits
- Crypto Gains: Special 8% taxation introduced for qualifying crypto-asset disposals
Personal Tax Changes
- SDC on Dividends:
17%-> 5%, with transitional rules - Tax-Free Threshold:
EUR 19,500-> EUR 22,000 - Non-Dom Status: Preserved, with possible 5+5 year extension subject to conditions
- 60-Day Rule: Revised; the old requirement not to be tax resident elsewhere has been removed
Property CGT Changes
- CGT Rate: Still generally 20% on taxable gains from Cyprus immovable property
- General Exemption: Reported 2026 increase to EUR 30,000 lifetime allowance
- Main Home Exemption: Reported 2026 increase to EUR 150,000, subject to conditions
- Seller Focus: Keep purchase, transfer-fee, improvement and agent-invoice evidence before listing
Who Is Affected? Select Your Profile
Tailored analysis for common expat and company profiles.
Before vs After: Visual Comparison
Headline rate changes at a glance.
Corporate Income Tax Rate
SDC on Dividends (Domiciled Residents)
Capital Gains Tax: What Property Sellers Should Check
Capital gains tax is especially important for expats selling Cyprus property, because the taxable gain depends on documents, indexation, allowable costs and lifetime exemptions. The points below are a planning summary based on published 2026 reform commentary and should be checked with a lawyer or tax adviser before signing a sale agreement.
How the Cyprus CGT calculation works
- CGT generally applies to gains from disposing of immovable property situated in Cyprus.
- The headline rate is generally 20% on the taxable gain, not on the full sale price.
- The gain is usually built from the sale price minus the indexed acquisition cost, then reduced by allowable documented expenses.
- Allowable items can include sale-related legal fees, original transfer fees, qualifying capital improvements and licensed estate-agent commission, where properly invoiced.
- A Land Registry search certificate can help confirm acquisition details and transfer-fee history where the old paperwork is incomplete.
2026 exemption points to confirm
- The general lifetime exemption is reported as increasing from EUR 17,086 to EUR 30,000 per individual.
- The private residence exemption is reported as increasing from EUR 85,430 to EUR 150,000, subject to the main-home occupation conditions.
- The agricultural land exemption is reported as increasing from EUR 25,629 to EUR 50,000, subject to its own conditions.
- Transfers between close relatives, donations to certain public or charitable bodies, and properties acquired during the 16 July 2015 to 31 December 2016 special period can need separate review.
- Do not assume the highest exemption applies automatically. Prior use of lifetime exemptions, ownership history, evidence of occupation and acquisition route can change the answer.
Practical expat note
Before marketing a Cyprus property, build a simple file with the purchase contract, title-deed or transfer documents, transfer-fee receipts, improvement invoices, agent agreement, legal invoices, EAC bills and bank evidence showing how the property was used. This makes the CGT discussion with your lawyer or accountant much faster and reduces the risk of losing deductions because the paperwork is missing.
Source used for this section: Demetriades Law, Capital Gains Tax in Cyprus 2026 update. Always verify the final tax treatment with the Cyprus Tax Department or a qualified professional.
Action Plan for 2026 Compliance
Practical steps to review during the 2026 tax year.
1. Audit & Model
- OKRecalculate corporate tax at 15% for 2026 profits
- OKReview whether tax losses qualify for the 7-year carry-forward period
2. Optimize Structure
- OKSeparate 2026 profits from pre-2026 profits for DDD transitional rules
- OKConfirm IP Box, dividend SDC and non-dom treatment
3. Execute & File
- OKUpdate payroll, accounting and provisional-tax assumptions
- OKCheck new deadlines, record-retention rules and penalties before filing
- OKIf selling Cyprus property, collect purchase, transfer-fee, improvement and main-home evidence before signing
FAQ - Practical Answers
Based on published 2026 reform summaries and current Tax Department resources.