--- title: "Cyprus tax for new residents 2026: rates and regimes" url: https://settleanywhere.com/countries/cyprus/tax/ lang: en updated: 2026-10-12 --- # Cyprus tax Tax residence: More than 183 days in tax year. 4 special regimes for new residents: Non-domiciled residents outside Special Defence Contribution, EUR 50,000 a year for deemed-domiciled residents, 5% flat tax option and Deduction for first employment in Cyprus. Checked against official sources on 12 Oct 2026 [Change log](https://settleanywhere.com/changes/) ## Tax residence - More than 183 days in tax year · Staying in Cyprus for periods exceeding 183 days in total in a tax year. - At least 60 days in tax year · 60-day rule: at least 60 days in Cyprus, not more than 183 days in any other country, carrying on business or employment in Cyprus, and keeping a permanent home in Cyprus that the person owns or rents. - Resident if staying over 183 days in a tax year, or under the 60-day rule: at least 60 days in Cyprus, no more than 183 days in another country, business or employment in Cyprus and an owned or rented permanent home there. - Not applicable. ## Special regimes for new residents Special regime ### Non-domiciled residents outside Special Defence Contribution (17 of 20 years) Tax relief Foreign-source income: Non-dom (17 of 20 years) **Details** - On: SDC on dividends (5% for residents who are domiciled) and interest - Who: Tax resident of Cyprus under the Income Tax Law Special Defence Contribution (SDC) applies only to residents who are also domiciled in Cyprus, so a tax resident without Cyprus domicile pays no SDC on dividends or interest; an individual is deemed domiciled after being tax resident in at least 17 of the last 20 years before the tax year. (sources 7, 8, 2) #### Taxed on SDC on dividends (5% for residents who are domiciled) and interest (17% for residents who are domiciled) under Law 117(I)/2002 as amended; ordinary income tax on residents continues to apply to worldwide income. #### Who it applies to - Tax resident of Cyprus under the Income Tax Law. - No domicile of origin in Cyprus under the Wills and Succession Law, or domicile of choice abroad with 20 consecutive years of non-residence; deemed domicile arises after 17 of the last 20 years as a tax resident and persists until 20 years without residence. #### Exclusions - Persons with domicile of origin in Cyprus are domiciled for SDC. - Persons who reach 17 of the last 20 years of residence become domiciled and subject to SDC unless they elect the alternative in Article 3D (see “Alternative SDC: EUR 50,000 (≈ $55,900) a year (EUR 250,000 (≈ $279,000) for five years) for deemed-domiciled residents”). - Cyprus income tax on residents still applies to worldwide income under the scales in “Personal income tax scales from 2026”. #### Tax residence Tax residence is decided each year under Law 118(I)/2002 (183 days, or the 60-day rule); domicile is a separate test for SDC. Non-domiciled individuals can apply for exemption on form T.F.38. #### Visas A residence permit does not change domicile; tax residence years are what count. #### Other taxes SDC on rent and deemed dividend distributions were removed by Law 245(I)/2025 effective 1 January 2026; social insurance and GHS contributions are separate. Checked against official sources on 12 Oct 2026 [Change log](https://settleanywhere.com/changes/) Special regime ### Alternative SDC: EUR 50,000 a year (EUR 250,000 for five years) for deemed-domiciled residents Tax relief Foreign-source income: Lump sum EUR 250,000 / 5 years **Details** - On: Flat SDC amount instead of SDC on income - Who: No domicile of origin in Cyprus and deemed to have acquired domicile - Limit: €50k/yr ≈ $56k From 1 January 2026 a person who has no domicile of origin in Cyprus but is deemed domiciled may elect to pay EUR250,000 (≈ $279,000) for a five-year period (EUR50,000 (≈ $55,900) a year) instead of special defence contribution on income, and may do this for up to two such periods. (sources 7, 2) #### Taxed on Flat SDC amount instead of SDC on income; the election covers five consecutive tax years and is irrevocable. #### Who it applies to - No domicile of origin in Cyprus and deemed to have acquired domicile (17 of the last 20 years of residence). - Application on the prescribed form to the Commissioner by 30 June of the first year of the period; payment of EUR 250,000 (≈ $279,000) by the end of the month after acceptance. #### Exclusions - No refund of the amount paid for any reason; no foreign tax credit against it; not offset against other liabilities. - If not paid on time the provision does not apply for any year and SDC is charged on income. - Available for up to two five-year periods. #### Limits - EUR 50,000 a year (≈ $55,900) · Annual flat SDC on election, regardless of income - EUR 250,000 (≈ $279,000) · Single payment covering the five-year period #### Tax residence Applies to tax residents with no domicile of origin in Cyprus who are deemed domiciled after 17 of the last 20 years of tax residence; the rule is Article 3D of the Special Defence Contribution Law, as amended, with Tax Department circular 02/2026. #### Visas Not tied to a visa. #### Other taxes Income tax on residents is unaffected. The application is made on form TD 631 (2026). The filing deadline and payment date in this record come from the law and the circular, which are published in Greek only and were not re-read against the Tax Department page. Checked against official sources on 12 Oct 2026 [Change log](https://settleanywhere.com/changes/) Special regime ### Foreign pensions: 5% flat tax option 5% tax **Details** - On: Pension income received from abroad by a Cyprus tax resident - Who: Cyprus tax resident receiving income from a foreign pension - Limit: €5,000/yr ≈ $5,590 Cyprus tax residents who receive a foreign pension can choose the normal income tax rates or a 5% flat rate on pension income exceeding EUR5,000 (≈ $5,590) a year. (source 5) #### Taxed on Pension income received from abroad by a Cyprus tax resident; the 5% applies to the amount above EUR5,000 (≈ $5,590) a year. #### Who it applies to - Cyprus tax resident receiving income from a foreign pension. - The 5% flat rate is an option; the normal scales can be chosen instead. #### Limits - EUR 5,000 a year (≈ $5,590) · The 5% rate applies to foreign pension income exceeding this amount #### Tax residence Applies to Cyprus tax residents (more than 183 days, or the 60-day rule). #### Visas Independent of visa type; relevant to holders of the secured-income (Category F) permit. #### Other taxes The relevant double taxation agreement should also be checked; social insurance and GHS contributions are separate. Checked against official sources on 12 Oct 2026 [Change log](https://settleanywhere.com/changes/) Special regime ### Deduction for first employment in Cyprus (20% or 50% of employment income) Tax relief **Details** - On: Employment income - Limit: €8,550/yr ≈ $9,550 Employees claiming the first-employment deduction can deduct 20% of employment income (maximum EUR8,550 (≈ $9,550)), or 50% of employment income where the salary exceeds EUR55,000 (≈ $61,400) (EUR100,000 (≈ $112,000) under the earlier circular). (sources 9, 10) #### Taxed on Employment income; the deduction reduces taxable income before the ordinary scales. #### Who it applies to - First employment in the Republic, claimed by the employee on the annual deduction declaration. - The 50% deduction needs a salary above EUR55,000 (≈ $61,400) in the tax year (circulars 2022/10 and 2024/04), or above EUR100,000 (≈ $112,000) under circular 2017/4. - For an individual whose employment began from July 2023, the 50% deduction continues regardless of a change of employer when the conditions are met. #### Limits - EUR 8,550 a year (≈ $9,550) · Maximum amount of the 20% deduction - EUR 55,000 a year (≈ $61,400) · Salary above which the 50% deduction applies (circulars 2022/10 and 2024/04) - EUR 100,000 a year (≈ $112,000) · Salary above which the 50% deduction applies under circular 2017/4 #### Tax residence Applies to employees who are tax resident in Cyprus; the required period of earlier residence abroad and the number of years the deduction runs are set in the circulars. #### Visas Independent of visa type; the Migration Department FAQ for EU Blue Card holders notes the 50% deduction. #### Other taxes Social insurance and GHS contributions are separate. Checked against official sources on 11 Oct 2026, some details partly verified [Change log](https://settleanywhere.com/changes/) ## Standard rules and foreign-source income Standard rules ### Personal income tax scales from 2026 (EUR 22,000 tax-free) **Details** - On: Annual taxable income of tax residents - Limit: €22k/yr ≈ $25k From the 2026 tax year the first EUR22,000 (≈ $24,600) of taxable income is taxed at 0%, then 20% to EUR32,000, (≈ $35,700) 25% to EUR42,000, (≈ $46,900) 30% to EUR72,000 (≈ $80,400) and 35% above. (sources 1, 2, 3) #### Taxed on Annual taxable income of tax residents. #### Who it applies to - Tax resident individuals: more than 183 days in Cyprus in the tax year, or the 60-day rule. #### Limits - EUR 22,000 a year (≈ $24,600) · Tax-free band at 0% - EUR 32,000 a year (≈ $35,700) · Upper limit of the 20% band - EUR 42,000 a year (≈ $46,900) · Upper limit of the 25% band - EUR 72,000 a year (≈ $80,400) · Upper limit of the 30% band; 35% above #### Days in the country - More than 183 days in tax year · Staying in Cyprus for periods exceeding 183 days in total in a tax year. - At least 60 days in tax year · 60-day rule: at least 60 days in Cyprus, not more than 183 days in any other country, carrying on business or employment in Cyprus, and keeping a permanent home in Cyprus that the person owns or rents. #### Tax residence Resident if staying over 183 days in a tax year, or under the 60-day rule: at least 60 days in Cyprus, no more than 183 days in another country, business or employment in Cyprus and an owned or rented permanent home there. #### Visas Not tied to a visa category. #### Other taxes Social insurance and GHS contributions are separate. From 2026 every tax resident aged 25 to 70 must register and file a return; the VAT registration threshold is EUR15,600 (≈ $17,400) of turnover. Checked against official sources on 12 Oct 2026 [Change log](https://settleanywhere.com/changes/) Standard rules ### Corporate income tax 15% from 2026 15% tax **Details** - On: Taxable profits of Cyprus tax-resident companies and permanent establishments - Who: Cyprus tax-resident companies Corporate income tax rises from 12.5% to 15% from 1 January 2026; dividends paid to domiciled resident individuals bear 5% special defence contribution (from 17%) on profits earned after 1 January 2026. (sources 4, 5, 6) #### Taxed on Taxable profits of Cyprus tax-resident companies and permanent establishments. #### Who it applies to - Cyprus tax-resident companies. #### Exclusions - Interest income of domiciled resident individuals remains at 17% special defence contribution. #### Tax residence Not applicable. #### Visas Independent of visas. #### Other taxes Real dividends 5% SDC on profits from 2026; stock options 8% flat; crypto gains 8%. Checked against official sources on 12 Oct 2026 [Change log](https://settleanywhere.com/changes/) ## VAT, social security and other taxes - Social insurance and GHS contributions are separate. From 2026 every tax resident aged 25 to 70 must register and file a return; the VAT registration threshold is EUR15,600 (≈ $17,400) of turnover. - Real dividends 5% SDC on profits from 2026; stock options 8% flat; crypto gains 8%. - SDC on rent and deemed dividend distributions were removed by Law 245(I)/2025 effective 1 January 2026; social insurance and GHS contributions are separate. - Income tax on residents is unaffected. The application is made on form TD 631 (2026). The filing deadline and payment date in this record come from the law and the circular, which are published in Greek only and were not re-read against the Tax Department page. ## Questions people ask ### When do you become a tax resident in Cyprus? More than 183 days in tax year (Staying in Cyprus for periods exceeding 183 days in total in a tax year); At least 60 days in tax year (60-day rule: at least 60 days in Cyprus, not more than 183 days in any other country, carrying on business or employment in Cyprus, and keeping a permanent home in Cyprus that the person owns or rents). Resident if staying over 183 days in a tax year, or under the 60-day rule: at least 60 days in Cyprus, no more than 183 days in another country, business or employment in Cyprus and an owned or rented permanent home there. ### Who qualifies for Non-domiciled residents outside Special Defence Contribution? Tax resident of Cyprus under the Income Tax Law. A residence permit does not change domicile; tax residence years are what count. ### Who qualifies for EUR 50,000 a year for deemed-domiciled residents? No domicile of origin in Cyprus and deemed to have acquired domicile (17 of the last 20 years of residence). Not tied to a visa. ### Who qualifies for 5% flat tax option? Cyprus tax resident receiving income from a foreign pension. Independent of visa type; relevant to holders of the secured-income (Category F) permit. ### How are Digital nomad permit holders taxed in Cyprus? No special regime in our records is tied to the Digital nomad permit. The standard rules apply: From the 2026 tax year the first EUR22,000 (≈ $24,600) of taxable income is taxed at 0%, then 20% to EUR32,000, (≈ $35,700) 25% to EUR42,000, (≈ $46,900) 30% to EUR72,000 (≈ $80,400) and 35% above. ≈ USD figures are approximate: daily reference rates from ExchangeRate-API, dated 12 Oct 2026, refreshed when the site is updated. **Sources (10)** ## Official sources 1. [Tax reform: benefits for all citizens (income tax scales 2026)](https://www.gov.cy/taxreform/fisika-proswpa/forologika-ofeli-gia-oloys-toys-polites/) · Ministry of Finance of Cyprus · checked 2026-10-12 2. [Tax residency and domicile](https://www.gov.cy/mof-tax/en/documents/tax-residency-domicility/) · Tax Department, Cyprus · checked 2026-10-12 3. [Registering for income tax and VAT (2026 tax scales)](https://www.businessincyprus.gov.cy/doing-business-in-cyprus/start-your-business/registering-for-income-tax-and-value-added-tax/) · Business in Cyprus (Republic of Cyprus) · checked 2026-10-11 4. [Tax reform: benefits for companies (corporate tax, dividends)](https://www.gov.cy/taxreform/forologika-ofeli-gia-epixeiriseis-nomika-proswpa/) · Ministry of Finance of Cyprus · checked 2026-10-12 5. [Tax incentives](https://www.gov.cy/mof/en/documents/tax-incentives/) · Ministry of Finance of Cyprus · checked 2026-10-12 · published 2026-01-15 6. [Tax reform: in force from 1 January 2026](https://www.gov.cy/taxreform/) · Republic of Cyprus · checked 2026-10-12 · published 2026-01-01 7. [Special Contribution for the Defence of the Republic Law 117(I)/2002, consolidated text including amendments to Law 245(I)/2025 (Greek text)](https://www.cylaw.org/nomoi/enop/non-ind/2002_1_117/full.html) · CyLaw (Cyprus Bar Association legal database) republishing the Official Gazette · checked 2026-10-10 8. [Income Tax Law 118(I)/2002, consolidated text (Greek), definition of resident of the Republic](https://www.cylaw.org/nomoi/enop/non-ind/2002_1_118/full.html) · CyLaw (Cyprus Bar Association legal database) republishing the Official Gazette · checked 2026-10-10 9. [Declaration for claiming tax deductions, tax year 2026 (form IR59)](https://www.gov.cy/media/sites/29/2026/01/IR59_2026_English__.pdf) · Tax Department · checked 2026-10-11 10. [EU Blue Card](https://www.gov.cy/mip-md/en/documents/eu-blue-card/) · Migration Department, Deputy Ministry of Migration and International Protection · checked 2026-10-12