Quick Answer
Cyprus corporate tax is 15%. Non-Dom residents pay 2.65% GHS on dividends (0% SDC), making the effective dividend extraction rate approximately 17-18% total. Income tax applies to salary: 0% up to EUR 19,500, up to 35% above EUR 60,000. There is no capital gains tax on shares, no inheritance tax, and no wealth tax.
Key Facts 2026
| Corporate tax (from 2026) | 15% |
| Personal income tax: 0% threshold | EUR 0-22,000 |
| Personal income tax: top rate | 35% (above EUR 72,000) |
| Dividend tax (Non-Dom) | 2.65% GHS only (0% income tax) |
| Dividend tax (standard resident) | 7.65% (5% SDC + 2.65% GHS, post-2026 reform) |
| Capital gains on shares | 0% |
| Capital gains on Cyprus real estate | 20% |
| VAT standard rate | 19% |
| Social insurance (employee) | 8.8% |
| Inheritance tax | 0% (abolished in 2000) |
Cyprus Tax Rates for Foreigners: Complete Reference 2026
Every Cyprus tax rate in one place: corporate tax, personal income tax, Non-Dom dividends, VAT, social insurance, GHS, capital gains, and more. Updated for 2026.
Last updated:
Quick Answer: Cyprus corporate tax is 15% flat. Non-Dom residents pay 0% income tax on dividends, plus 2.65% GHS only - making the effective rate approximately 5% for most business owners. Personal income tax starts at 0% up to EUR 22,000. VAT standard rate is 19%.
Tax rates on paper are one thing. What you actually pay depends on your income mix, company structure, and residency status. Book a consultation to model your specific situation.
Frequently Asked Questions: Cyprus Tax Rates
What is the corporate tax rate in Cyprus?
Cyprus corporate income tax is a flat 15% on net profits with no progressive tiers. All Cyprus-incorporated companies pay 15% on worldwide profits after allowable deductions. Certain IP income may qualify for an effective 2.5% rate under the IP Box regime.
How much tax do Non-Dom residents pay on dividends?
Non-Dom residents pay 0% income tax and 0% SDC on dividends, with only 2.65% GHS applied (capped at EUR 180,000 annual income). Maximum GHS on dividends is EUR 4,770 yearly. A business owner distributing EUR 100,000 in dividends pays EUR 2,650 total, an effective rate of 2.65%.
What is the income tax-free threshold in Cyprus?
EUR 22,000 per year is the income tax-free threshold in Cyprus for individuals. Income above this amount is taxed at progressive rates ranging from 20% to 35%.personal income tax guide for full bracket details.
What is the VAT rate in Cyprus?
The standard VAT rate in Cyprus is 19%. Reduced rates apply: 9% for hotels, restaurants, and newspapers; 5% for food, medicines, books, and public transport. Financial services, insurance, and education are VAT-exempt at 0%.
Do I pay capital gains tax on selling shares in Cyprus?
No capital gains tax applies to share sales in Cyprus. Gains from disposing of shares, bonds, and other securities are fully exempt, whether the company is listed or unlisted, and for both residents and non-residents.
What is the GHS (GESY) contribution rate for self-employed?
Self-employed individuals in Cyprus contribute 4.0% to GHS (GESY) on income up to EUR 180,000 per year, with a maximum annual contribution of EUR 7,200. Social insurance contributions of 15.6% apply separately up to the insurable earnings ceiling.
Is rental income taxed in Cyprus?
Yes, rental income is taxed in Cyprus at standard personal income tax rates (0% up to EUR 22,000, then progressive to 35%). GHS at 2.65% applies to rental income up to EUR 180,000 cap. SDC on rental income was abolished from 1 January 2026 for all Cyprus tax residents, and Non-Dom residents are exempt from SDC on rental income.
How does Cyprus compare to other EU countries on tax rates?
Cyprus has one of the lowest effective tax burdens in the EU for business owners. The 15% corporate rate falls well below the EU average of approximately 21%. Non-Dom residents pay an effective rate of just 2.65% on dividend income, unmatched across the EU. Capital gains on securities are taxed at 0%, compared to 20-30% in most EU countries. VAT stands at 19%, aligned with the EU average.
Frequently Asked Questions
Is Cyprus a tax-free country?
No - Cyprus is not tax-free, but it is one of the lowest-tax EU jurisdictions. A non-domiciled resident with a Cyprus company pays: 15% corporate tax on company profits, 2.65% GESY on dividends, 0% income tax on dividends (non-dom exemption), and 0% CGT on shares. The effective combined rate on profits distributed as dividends is approximately 17 to 18 percent in total.
Compare to the UK (54% effective for a sole trader), Germany (48%+), or France (50%+). Strictly tax-free countries (0% income tax and 0% corporate tax) include the UAE, the Cayman Islands, and Monaco - none of which are EU members with full banking access and double tax treaty networks. Cyprus is legally low-tax and EU-compliant, not zero-tax.