Cyprus Tax Rates 2026: Complete Guide
Corporate tax 15%. VAT 19%. Non-dom status exempts dividends from SDC. Here is every Cyprus tax rate that matters for 2026.
In this guide
Complete guide to Cyprus tax rates for 2026. Corporate tax 15%, VAT 19%, personal income tax, non-dom SDC 5% and capital gains 20% all explained.
- Standard rate
- 19%
- Reduced rate
- 9%
- Reduced rate
- 5%
- Registration threshold
- €15,600
Corporate tax
15%
On company profits
VAT standard
19%
Most goods and services
Capital gains
20%
On property
Non-dom SDC
0%
On foreign dividends
Why Cyprus tax rates matter for founders and businesses
Cyprus has one of the most competitive tax frameworks in the EU for businesses and internationally mobile individuals. Corporate tax at 15% is among the lowest in the EU. Non-dom status eliminates Special Defence Contribution on foreign dividends entirely. No withholding tax on dividends paid to non-residents. No capital gains tax on disposal of securities. Understanding which rates apply to your specific situation determines whether Cyprus is as efficient for you in practice as it appears in theory.
Cyprus tax rates 2026 — full reference
| Tax type | Rate | Applies to | Notes |
|---|---|---|---|
| Corporate income tax | 15% | Company profits | Increased from 12.5% to 15% from 2026 |
| VAT — standard | 19% | Most goods and services | Unchanged since 2014 |
| VAT — reduced | 9% | Hotels, restaurants, transport | Hospitality sector |
| VAT — reduced | 5% | Food, medicine, renovation | Home renovation |
| VAT — reduced | 3% | Books, newspapers | Print and electronic |
| Personal income tax | 0–35% | Individual income | Progressive bands — 0% up to €22,000 |
| Capital gains tax | 20% | Property disposals | Immovable property only — not securities |
| Special Defence Contribution — dividends | 5% | Dividend income | Reduced from 17% in 2026 |
| Special Defence Contribution — interest | 17% | Interest income | Cyprus resident individuals |
| SDC for non-doms — dividends | 0% | Foreign dividends | Non-dom status for up to 17 years |
| Withholding tax — dividends to non-residents | 0% | Outbound dividends | No withholding on dividends |
| Inheritance tax | 0% | Estate on death | No inheritance or estate tax in Cyprus |
Corporate tax in Cyprus — 15%
Cyprus corporate income tax applies to the profits of all Cyprus-registered companies and foreign companies with a permanent establishment in Cyprus. The rate is 15% on net taxable profits after allowable deductions. The rate increased from 12.5% to 15% as part of the OECD global minimum tax framework. For most profitable Cyprus companies the 15% rate remains highly competitive by EU standards — Germany is 29.9%, France is 25%, the Netherlands is 25.8%.
Non-dom status and SDC
Special Defence Contribution — SDC — is a Cyprus tax on investment income for Cyprus tax residents. The standard SDC rate on dividends is 5% from 2026 (reduced from 17%). However individuals with non-dom status are completely exempt from SDC on foreign dividends for up to 17 years from becoming Cyprus tax resident. Non-dom status is available to individuals who were not Cyprus tax resident for at least 10 of the 20 years preceding the year they become resident. For a founder receiving €200,000 in annual dividends non-dom status saves €10,000 per year in SDC — real money over 17 years.
VAT rates in Cyprus 2026
Cyprus VAT operates at four positive rates plus zero-rating and exemption. The standard rate of 19% applies to most goods and services. The 9% reduced rate applies to hospitality — hotels, restaurants, transport, cinema. The 5% reduced rate applies to food, medicines and renovation of homes. The 3% rate applies to books, newspapers and periodicals. Exports are zero-rated. Financial services, residential rentals and certain other supplies are exempt. For a full breakdown of what falls under each rate see our Cyprus VAT rates guide.
For comprehensive Cyprus tax planning including corporate structure, non-dom applications, IR4 returns and full tax advisory visit tax.com.cy — the dedicated Cyprus tax platform. For VAT-specific compliance stay on vat.com.cy.
Key takeaways
- ●Cyprus corporate tax is 15% on company profits — competitive by EU standards
- ●VAT standard rate is 19% with reduced rates of 9% for hospitality, 5% for food, medicine and home renovation, and 3% for books and newspapers
- ●Capital gains tax of 20% applies to property but not to disposal of securities
- ●Non-dom status eliminates SDC on foreign dividends for up to 17 years
- ●SDC on dividends reduced from 17% to 5% from 2026 — even non-dom status is now less critical for the dividend saving
Frequently asked questions
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