Cyprus Tax News: 8% Tax on Cryptocurrency Profits

On 22 December 2025, the Parliament of Cyprus approved a comprehensive tax reform that came into force starting from 1 January 2026.

One of the key focuses of the reform is the stimulation of the digital economy, cryptocurrency regulation, crypto investments, and start-ups, as well as increasing Cyprus’s attractiveness as a crypto-friendly jurisdiction for international investors and IT entrepreneurs.

Cryptocurrency Tax 2026: Flat 8% Rate

For the first time at the legislative level, Cyprus has introduced a clear and transparent system for the taxation of crypto assets. Profits from the sale of cryptocurrencies (including Bitcoin and other digital assets) are taxed at a fixed rate of 8%, separately from standard personal income tax.

At the same time, investors are allowed to account for losses from cryptocurrency transactions and offset them against profits within the same tax year, meaning that only net profit is subject to taxation.

Key Features of Cryptocurrency Profit Taxation in Cyprus:

• a flat 8% tax rate applies with no progressive scale;
• tax is levied only on net profit, not on turnover;
• cryptocurrency losses can be offset against profits within the same tax year;
• crypto transactions are officially removed from the “grey zone”.

As a result, investors pay tax only on the difference between income and expenses, making the tax burden predictable. This approach significantly simplifies operations for crypto traders, private investors, blockchain start-ups, and fintech companies working with digital assets.

Why is Cyprus introducing a separate tax on crypto profits?

According to experts, the adopted measures provide long-awaited tax certainty for modern investment instruments and strengthen Cyprus’s position as one of the most attractive jurisdictions for technology businesses and digital investments in Europe.

The Ministry of Finance aims to establish official, transparent, and understandable rules, which will allow:

• legally declaring crypto profits;
• safely transferring cryptocurrency income into fiat;
• simplifying cooperation between crypto companies, banks, and regulators;
• attracting new investors and tech startups;
• increasing trust in Cyprus as a safe jurisdiction for digital business;
• harmonizing local legislation with European regulatory trends.

Cyprus has long positioned itself as a crypto-friendly country, and the introduction of a dedicated tax is a logical continuation of this strategy.

Feod Group Services

We provide full support to clients working with cryptocurrencies and digital assets:

• tax consulting;
• obtaining Cyprus tax residency;
• asset structuring and company formation;
• support with opening bank accounts;
• comprehensive legal and tax assistance.

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