What was the crypto tax situation in Cyprus before 2026?

Prior to 2026, there was no specific capital gains tax on crypto-assets for individuals in Cyprus. Gains were generally treated as capital in nature and not taxable unless the activity constituted a trade. From 1 January 2026, the 8% flat tax under Article 20E changes this.

Does the 8% apply to holding crypto?

No. Article 20E is triggered only by a disposal event: selling, exchanging, donating, or using crypto as payment. Simply holding a crypto-asset does not create a taxable event under the new rule.

Are stablecoins included?

Yes, if a stablecoin qualifies as a crypto-asset under MiCA. Converting between stablecoins or from stablecoin to fiat constitutes a disposal and may generate a taxable gain, subject to the 8% rate.

Does mining income get taxed differently?

Yes. Mining is excluded from the 8% Article 20E regime. Mining proceeds are treated as active business income: subject to progressive personal income tax rates (up to 35%) for individuals, or 15% corporate tax for companies, depending on whether the mining activity is conducted personally or through a company.

Will exchanges report my trades to the tax authority?

CASPs licensed in Cyprus are required under DAC8 to report user transaction data to the Cyprus Tax Department starting in 2026. For non-residents, that data is automatically shared with the tax authority in the user's country of fiscal residence.

Is the 8% on the full sale proceeds or just the profit?

Only on the net gain: proceeds minus the original acquisition cost (cost basis). If the acquisition cost equals or exceeds the proceeds, there is no taxable gain and no tax is due.

Does Non-Dom status reduce the 8% crypto tax?

No. The Non-Dom exemption covers SDC on dividends and interest income only. Article 20E is a separate tax category and Non-Dom status provides no exemption from it. All Cyprus tax residents, including Non-Doms, pay 8% on qualifying crypto disposal gains from 2026.

Cyprus Introduces 8% Tax on Crypto Gains: What Holders and Traders Need to Know

Jan 2, 2026

Tax Updates

Read time: 3 minutes

Miriam Alonso

Cyprus no longer taxes crypto gains at zero for individual holders. A new Article 20E inserted into the Income Tax Law, part of the December 2025 tax reform package, imposes an 8% flat tax on profits from the disposal of crypto-assets, effective from 1 January 2026.

What Article 20E Covers

The new rule applies to gains from the disposal of crypto-assets as defined under EU Regulation 2023/1114 (MiCA). Disposal includes: selling crypto for fiat currency; exchanging one crypto-asset for another; donating crypto-assets; and using crypto as payment for goods or services. The 8% rate applies to both individuals and corporate entities subject to Cyprus income tax.

Gains are calculated as sale proceeds minus the original acquisition cost. The rate is flat at 8%, regardless of the size of the gain or the holding period.

What Is Excluded

Crypto-assets acquired through mining are excluded from the 8% regime. Mining income is treated as active business income and taxed under standard income tax or corporate tax rates, not the Article 20E flat tax. Staking rewards, airdrops, and similar receipts are generally treated as income at market value on the date of receipt, subject to ordinary income tax rates rather than the 8% disposal tax.

Loss Treatment

Tax losses from crypto disposals can only be offset against crypto gains realised in the same tax year. They cannot be carried forward to future years and cannot be transferred as group relief to other group companies. This is less favourable than the treatment of ordinary business losses, which can be carried forward for 7 years under the updated Cyprus tax rules.

Non-Dom Residents

The 8% crypto gains tax applies to Non-Dom residents. Article 20E is a new specific tax category and is not a form of SDC or dividend tax. The Non-Dom exemption does not cover it. A Non-Dom individual who disposes of crypto-assets and realises a gain owes 8% on that gain to the Cyprus Tax Department, the same as any other Cyprus tax resident.

Corporate Structuring

One approach used in practice involves holding crypto-assets through a Cyprus company rather than directly as an individual. At the corporate level, the same 8% rate applies to crypto disposal gains under Article 20E. The after-tax proceeds can then be distributed as dividends to a Non-Dom shareholder at 0% SDC, plus 2.65% GESY (capped at EUR 180,000 of income base). The effective combined rate on the full cycle is approximately 10.5%.

DAC8 Reporting Requirements

Separately from the new tax, Cyprus transposed the EU DAC8 Directive (2023/2226) before 31 December 2025, effective from 1 January 2026. Crypto-Asset Service Providers (CASPs) operating in Cyprus are required to collect and verify the tax residency of their users and report annually to the Cyprus Tax Department.

Data for non-resident users is automatically exchanged with the tax authority in the user's country of residence. CASPs licensed in Cyprus, including exchanges, brokers, and wallet providers, are within scope. This applies regardless of whether users owe tax in Cyprus.

Sources: Chambers & Co - Article 20E analysis; TotalServe - reform approval; Global VAT Compliance - DAC8 Cyprus; Mondaq - 8% crypto tax.