Cyprus
Top Income Tax
35%
Marginal rate
Corporate Tax
12.5%
Standard rate
VAT / Sales Tax
19%
Standard rate
Capital Gains
0%
Standard rate
Overview
Cyprus is a popular tax planning jurisdiction with no capital gains tax on securities, a non-dom regime that exempts passive income, and a 50% employment income exemption. The 12.5% corporate rate and IP Box make it ideal for holding companies.
Income Tax Brackets
| Income Range (EUR) | Tax Rate |
|---|---|
| 0 - 19,500 | 0% |
| 19,500 - 28,000 | 20% |
| 28,000 - 36,300 | 25% |
| 36,300 - 60,000 | 30% |
| 60,000+ | 35% |
Generous 19,500 EUR tax-free allowance.
Corporate Tax
Standard Rate
12.5%
12.5% - one of the lowest in the EU. IP Box effective rate can be as low as 2.5%.
VAT / Sales Tax
Standard Rate
19%
Reduced Rates
5%, 9%
5% on food, books. 9% on accommodation, restaurants.
Capital Gains Tax
Standard Rate
0%
No capital gains tax except on disposal of immovable property in Cyprus (20%).
Social Security Contributions
Employee
8.3%
Employer
12%
Self-Employed
15.6%
Covers social insurance, redundancy, training, social cohesion.
Special Tax Regimes
Non-Dom Regime
Non-domiciled tax residents are exempt from Special Defence Contribution (SDC) on dividends, interest, and rental income. Effectively 0% on passive income.
Eligibility: Must be Cyprus tax resident but not domiciled. Non-dom status available for 17 years.
50% Employment Income Exemption
50% of remuneration is exempt from income tax for 17 years for new employees earning over 55,000 EUR.
Eligibility: Must not have been Cyprus tax resident in 3 of previous 5 years. Minimum salary 55,000 EUR.
Digital Nomad Visa
Digital nomad visa for non-EU nationals. Must earn at least 3,500 EUR/month. Valid 1 year, renewable up to 3 years.
Pros & Cons
Pros
- No capital gains tax on securities
- Non-dom exempts passive income
- 50% employment exemption
- 12.5% corporate tax
- IP Box at ~2.5%
Cons
- Divided island
- Small domestic market
- Hot summers
- Limited public transport
Living Indicators
Cost of Living Index
Moderate
Quality of Life Index
Good
Best For
Data Sources
Tax rate data for Cyprus is compiled from the following authoritative sources:
- OECD Tax Database
- Tax Foundation International Tax Competitiveness Index
- World Bank Business Enabling Environment
- Cyprus government tax authority publications
- PwC Worldwide Tax Summaries
Last verified: 2024-01
Disclaimer: This content is for informational purposes only and does not constitute tax advice. Tax laws change frequently. Always consult a qualified tax professional before making decisions about your tax residency or obligations.