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 | 15% | Can be lowered to 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 €22.000 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. |
Here’s the practical “tax benefit map” that matters for real-world holding companies.
A Cyprus holding structure acts as a tax-neutral “money box.” It allows you to collect, hold, and reinvest global profits without the constant drag of local corporate or dividend taxes.
| Tax Type | 2025 Rate | 2026 Voted Rate |
| Personal Tax-Free Limit | €19,500 | €22,000 |
| Corporate Tax | 12.5% | 15.0% |
| SDC on Dividends (Domiciled) | 17.0% | 5.0% |
| SDC on Rental Income | 2.25% (eff.) | 0% (Abolished) |
| Crypto Asset Tax | Unclear | 8% (Flat) |
The 15% corporate tax is only the starting point. For most digital companies, the effective rate is often lower due to strategic deductions.
For founders relocating to the island, the “Non-Dom” status is the single most powerful wealth-building tool in Europe.
Cyprus is pragmatic about modern asset classes, offering clear rules for real-estate and international trade.
Numbers matter more than words. Use these tools to calculate your exact savings compared to your current home country.
Yes, Cyprus is considered a low-tax country. With a 15% 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.
Locals pay 5% SDC Tax. 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.
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.
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