Cyprus Tax Reform to Take Effect on January 1, 2026

On June 24, 2025, a final meeting on tax reform was held at the Presidential Palace in Nicosia. President of the Republic of Cyprus, Nikos Christodoulides, confirmed that the changes will come into force on January 1, 2026, strictly on schedule and without any delays.

According to the President, this was the final meeting on the reform, and he emphasized that all draft laws must be prepared and submitted to Parliament on time.

The tax reform will introduce the following measures:

As announced, the new provisions will apply from the beginning of 2026:

• Increase of the tax-free income threshold to €20,500 per year;
• A new personal income tax scale: the 35% rate applies only to income above €80,000;
• Increase in the corporate income tax rate from 12.5% to 15%;
• Retention of the Non-Dom regime, with updated conditions;
• Expanded eligibility for 60-day tax residency.

You can find a detailed overview in our article: Tax Reform in Cyprus

Cyprus remains one of the most favorable tax jurisdictions in the EU

Despite selective tax rate increases, Cyprus continues to offer one of the most attractive tax regimes in the European Union. The overall tax burden remains significantly lower compared to most EU countries.

For example, even after the reform, the corporate tax rate will be 15% — still well below the EU average, which ranges from 21% to 28%.

Additional benefits include:

• Exemption from taxation of dividends and interest for Non-Dom tax residents;
• No inheritance tax or wealth tax;
• A broad network of double taxation treaties with over 65 countries.

At Feod Group, our legal and tax consultants closely monitor legislative changes and provide up-to-date solutions in tax planning, company registration, permanent residency, and tax residency on the island.

If you’re considering Cyprus for investment, relocation, or business purposes — contact us.
We offer comprehensive consultations tailored to the current legal and tax landscape.