The Ultimate EU Holding
Leverage on of the EU’s highest tax-free threshold. Fully updated with the December 22, 2025 Legislative Reform.
Cyprus has officially modernized its personal tax code to reward high-value residents. Whether you are a digital nomad, a corporate executive, or a business owner, the 2026 framework offers unparalleled relief, starting with a tax-free threshold of €22,000.
For entrepreneurs and high-earners in Western Countries like Germany, France, Netherlands or United Kingdom, “Personal Income Tax” isn’t just a bill, it’s a glass ceiling. When your income hits the 50% bracket, you are effectively working (sometimes more) than half the year for the state. This creates a massive drag on your ability to reinvest in your own growth or secure your family’s financial future.
Relocating to Cyprus replaces this punitive system with a pragmatic, founder-friendly framework. The 2026 reform isn’t just a minor tweak; it is a strategic expansion of the “Safe Haven” status.
By raising the tax-free threshold and introducing aggressive family deductions, Cyprus has made itself the most attractive destination for HNW (High Net Worth) individuals and digital-first founders in the Eurozone.
Under the newly voted legislation, your first €22,000 is entirely exempt from income tax. This shift provides immediate cash-flow benefits compared to the previous €19,500 limit.
| Income Bracket (€) | Tax Rate (%) | Accumulated Tax (€) |
| 0 – 22,000 | 0% | €0 |
| 22,001 – 28,000 | 20% | €1,200 |
| 28,001 – 36,300 | 25% | €3,275 |
| 36,301 – 60,000 | 30% | €10,385 |
| Over 60,000 | 35% | — |
If you are moving to Cyprus for employment, you may qualify for the “50% Exemption,” designed for high-value professionals.
The 2026 reform introduced “Household Deductions” that go far beyond standard business expenses. These are designed to lower your taxable base even further if you move with your family:
Our firm doesn’t just provide “accounting”; we provide Tax Residency Engineering.
Income is taxed on a progressive basis. Your gross income is first reduced by mandatory contributions (Social Insurance and GESY) and any applicable exemptions (like the 50% expat exemption). The remaining “Chargeable Income” is then applied to the tax brackets, with the first €22,000 (starting 2026) being taxed at 0%.
The new brackets are:
If you are a Cyprus Non-Dom, the answer is No. Dividends and “passive” interest are 100% exempt from personal income tax and the Special Defence Contribution (SDC) for a period of 17 years. You only pay a small, capped contribution to the health system (GESY).
From January 1, 2026, the personal tax-free allowance is €22,000. This is one of the highest in the EU, providing a significant “floor” of tax-free income for every individual tax resident on the island.
Yes. The 2026 reform introduced a preferential 8% flat rate for gains from crypto assets and qualifying employee stock options (ESOPs), moving these assets out of the “grey zone” and providing a clear, low-tax pathway for tech founders and investors.
Following the December 2025 reform, the first €22,000 of annual income is tax-free.
GeSY (National Healthcare) is a 2.65% contribution capped at an annual income of €180,000. Even with GeSY, the net take-home pay in Cyprus remains significantly higher than in the UK, Germany, or France.
