Cyprus tax rates are among the most competitive in the European Union, featuring a flat 15% corporate tax rate and a progressive personal income tax that starts at 0% for the first €22,000 of income.
International founders primarily benefit from the “Non-Dom” regime, which offers a 0% tax rate on dividends and interest for 17 years.
If you are running an agency, SaaS, or consulting business in Northern Europe, you aren’t just paying tax—you are being penalized for scaling.
Cyprus-Companyformation.com exists to stop this leak. We don’t sell “offshore” loopholes; we build high-substance, 100% legal structures that withstand any audit.
| Tax Pillar | Rate (Standard) | The “Founder” Reality |
| Corporate Income Tax | 12.5% | Can be lowered to 2.5% via NID or IP Box. |
| Dividend Tax (Non-Dom) | 0% | Fixed at 0% for 17 years for foreign expats. |
| Personal Income Tax | 0% – 35% | First €19,500 is tax-free; 50% exemption for high-earners. |
| Capital Gains (Exit) | 0% | No tax on the sale of shares, crypto, or subsidiaries. |
| Social Insurance | ~15.6% | Capped at a maximum monthly salary (huge savings). |
| VAT (Digital/SaaS) | 19% | Competitive EU rates with automated VIES filing. |
| Tax Type | 2025 Rate | 2026 Voted Rate |
| Personal Tax-Free Limit | €19,500 | €22,000 |
| Corporate Tax | 12.5% | 15.0% |
| SDC on Dividends (Dom) | 17.0% | 5.0% |
| SDC on Rental Income | 2.25% (eff.) | 0% (Abolished) |
| Crypto Asset Tax | Progressive | 8% (Flat) |
A Cyprus Ltd is the world’s best “Money Box.”
Notional Interest Deduction (NID): If you introduce new equity into your company, you can deduct 80% of the taxable profit. This isn’t a “loophole”—it’s a legal incentive that brings your tax bill down to 2.5%.
0% on Dividends Received: Your Cyprus holding company pays zero tax on dividends received from your subsidiaries worldwide.
Zero Exit Tax: When you sell your company, you keep 100% of the proceeds.
[Get the Corporate Tax Deep-Dive]
You don’t need to spend 6 months in Cyprus to benefit.
The 60-Day Rule: We structure your residency so you only need to be physically in Cyprus for 60 days per year.
The Non-Dom Exemption: For 17 years, you pay 0% SDC tax on dividends and interest. This is the ultimate tool for compound interest.
Belgian/Dutch Corridor Warning: We handle the “Center of Vital Interests” documentation to ensure your move is respected by the FPS Finance or Belastingdienst.
[How to Qualify for 60-Day Residency] | [The Non-Dom Benefit Checklist]
1. Business & Corporate Taxation
The 12.5% corporate tax is only the starting point. For most digital companies, the effective rate is often lower due to strategic deductions.
Cyprus Corporate Tax: A flat 12.5% on worldwide income.
Notional Interest Deduction (NID): An 80% tax deduction on new equity, potentially bringing your effective rate down to 2.5%.
IP Box Regime: Software development and patents can qualify for a massive reduction in taxable income.
[Deep Dive: Cyprus Corporate Tax] | [Compare Types of Companies in Cyprus]
2. Personal Tax & The Non-Dom Advantage
For founders relocating to the island, the “Non-Dom” status is the single most powerful wealth-building tool in Europe.
Cyprus Income Tax: Progressive bands starting at 20% after the first €19.5k.
Non-Dom Tax Regime: 0% tax on dividends and 0% tax on interest. This is a 17-year guarantee.
The 60-Day Rule: You can become a tax resident by staying only 60 days per year, provided you have a business and a home here.
[Deep Dive: Cyprus Non-Dom Tax] | [Guide to the 60-Day Rule]
3. Specialized Taxes: Crypto, VAT & Real Estate
Cyprus is pragmatic about modern asset classes, offering clear rules for crypto and international trade.
Cyprus Crypto Tax: Most gains from crypto are treated as tax-free “titles” unless you are classified as a professional trader.
Cyprus VAT: 19% standard rate. Registration is mandatory after €15,600 in turnover.
Capital Gains Tax: 0% on everything except physical real estate located in Cyprus.
[Deep Dive: Cyprus Crypto Tax] | [VAT & Social Insurance Rates]
4. Strategic Tools
Numbers matter more than words. Use these tools to calculate your exact savings compared to your current home country.
[Interactive Cyprus Income Tax Calculator]
[Cyprus Corporate Tax Calculator]
Stop paying for an inefficient system. [Book a Strategy Call] to map your relocation or [Begin Your Company Formation] to lock in these rates.
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Yes. With a 12.5% corporate rate and a 0% rate on dividends for expats, it is one of the most tax-efficient jurisdictions in the world. Unlike offshore havens, it is 100% compliant with EU and OECD standards, meaning your Cyprus company is respected by international banks.
If you are a Cyprus Non-Dom tax resident, you pay 0% tax on dividends. You are only required to pay a small National Health Contribution (GESY), which is capped at a maximum annual amount, regardless of how many millions you receive in dividends.
The corporate tax rate remains at 12.5%. While the OECD Pillar Two (15% global minimum tax) is being introduced, it only applies to multinational groups with annual revenues exceeding €750 million. For the vast majority of founders and SMEs, the rate stays at 12.5%.
No. Cyprus has no wealth tax, no inheritance tax, and no gift tax. This makes it a superior location for long-term asset protection and family wealth planning.
Technically yes, but it’s a tax nightmare. Your home country will likely claim the company is “effectively managed” from there. The “Top-Notch” move is to relocate the Place of Effective Management to Cyprus by incorporating a new Ltd or a Holding structure.
As of the December 2025 vote, the first €22,000 of annual income for individuals is completely tax-free.
Yes. From 2026, the Special Defence Contribution on rental income is abolished. Owners only pay standard Income Tax and GeSY (Healthcare) contributions.
Expats can choose between the standard €22,000 tax-free bands or a flat 5% tax on foreign pensions exceeding €5,000.