CURRENT TAX THRESHOLDS
Cyprus levies a standard corporate income tax rate of 15% and progressive personal income tax rates rising to 35%, alongside updated non-domicile dividend rules.
PERSONAL INCOME TAX
All Cypriot workers are subject to the following taxation rules
Personal tax-free threshold: €0 – €22,000
20% tax threshold: €22,001 – €32,000
25% tax threshold: €32,001 – €42,000
30% tax threshold: €42,001 – €72,000
35% tax threshold: All earnings above €72,001
CORPORATE TAXATION
All Cypriot-registered companies are subject to the following taxation rules
Corporate Tax Rate: A standard rate of 15% is payable for all Cyprus tax-resident companies
Deemed Distribution: Abolished for profits earned from 2026 onward
Stamp Duty: Completely abolished from 2026 onward
Special Defence Contribution: A standard rate of 5% on dividends for Cyprus-domiciled residents from 2026 onwards. Individuals who are tax-resident but non-domiciled remain completely exempt from special defence contributions.
OTHER TAXATION
Double taxation agreements with numerous countries reduce the risk of being taxed twice.
Foreign pension income: A standard rate of 5%
Inheritance Tax Rate: A standard rate of 0%
AN EXTREME RELIANCE ON LANDFILLS
AN OVERAL LACK OF GREEN INITIATIVES
It has been revealed that Cyprus currently has an extreme reliance on landfills. The island also has one of the lowest municipal recycling rates within the European Union. It has also been identified that the island has an overall lack of green initiatives and is one of the last countries in the European Union without a landfill tax.
A NEW TAX
This has prompted Cypriot authorities to introduce a new landfill tax initiative that also forms part of the island’s new green tax reforms. This new initiative will target municipal waste, forming part of the island’s current recovery and resilience strategy. The new tax starts at €35 and then gradually increases to a maximum of €70 per tonne of waste. The main goal is to align with European Union targets to reduce overall landfill waste. The current levels stand at nearly 60%, and the main aim is to reduce this to just 10% by 2035.
A 10% TARGET
The new Cyprus landfill tax will rise by €5 each year. These rises will continue until the maximum rate of €70 is reached. Once Cyprus meets its 10% target, the levy will then be discontinued. It is intended that revenue from the tax will be used to fund waste management projects and improve waste disposal methods. It is hoped that the tax, which is designed to discourage landfill use, will actively promote more recycling and organic waste separation across the island.
