Cyprus Corporate Tax Rate in 2026

Which rate applies to which income?

Trading profit pays 15% after allowable expenses. Most other income follows one of the lines below. A tax-resident company is taxed on income from all sources, with credits for foreign tax, and Cyprus has no local income taxes on top.

The low-tax test matters mostly to groups. Exemption from SDC on a foreign dividend is lost only if more than 50% of the payer's activities produce investment income and its effective foreign tax is below 7.5%. Both conditions must be met.

What changed on 1 January 2026?

The rate rose, and much of the tax around it was simplified or cut. The law and tax firms that reported the reform agree on the items below, and PwC's summaries confirm most of them. Treat the deemed dividend line as reported, and confirm it with your adviser.

Worked example: EUR 200,000 of profit, fully paid out

The owner's position is where the reform shows. This illustrative example takes one company with EUR 200,000 of taxable profit, paid out in full as a dividend to one individual with no other income. It ignores the owner's home-country tax, and it applies each year's rules to that year's profit.

The company pays EUR 5,000 more under the new rate. A Cyprus-domiciled owner still ends up EUR 16,382.50 better off on a full payout. A non-domiciled owner was already outside SDC, so that owner simply bears the higher rate and keeps EUR 4,867.50 less than under the 2025 rules. If you retain profit in the company for growth, the higher rate is the main change you feel.

Two limits apply. Dividends paid from pre-2026 profits can still carry 17%, so the year the profit was earned matters. And healthcare contributions may not apply to every owner in the same way, so ask your accountant to confirm.

When do you actually pay?

Most tax is paid during the year it relates to. A company estimates its profit and pays provisional tax in two equal instalments, then settles any balance by the return deadline. Tax year 2026 runs like this.

The Tax Department can open an enquiry within six years of filing, or 12 years in cases of established fraud or wilful default, so keep your working papers easy to find. The full list of filings sits in our annual compliance checklist.

Does the 15% apply to your company?

Yes, if the company is tax resident here, and a Cyprus-incorporated company is resident by default from 2026 unless a tax treaty says otherwise. A company managed and controlled in Cyprus is also resident. A non-resident company pays Cyprus tax on business carried on through a Cyprus permanent establishment and on certain other Cyprus-source income.

Very large groups have another layer. Groups with consolidated turnover of at least EUR 750 million fall under the global minimum tax rules, including a Cyprus domestic top-up tax. Founders and small groups are outside that regime.

A low rate on paper does not settle the question for you personally. Your home country may have its own rules on companies controlled by its residents, which is why a holding company needs advice on both sides. Tax is also only one part of whether Cyprus is a good place to start a business.

How can you spot an out-of-date guide?

Run three quick tests on anything you read about Cyprus tax, including quotes from providers.

• The rate. If 12.5% appears as the current rate, the page predates 2026.
• The dividend line. A flat 17% on all dividends misses the reform.
• The filing dates. A company return due on 31 March, or a balance due on 1 August, reflects the rules up to tax year 2025.

Search results on this topic are full of pages that fail at least one test. If a quote or a plan you have been given relies on the old figures, ask for it to be redone before you decide.

To see how the rate fits into the wider setup, read how to register a company in Cyprus, and take your plan to a Cyprus lawyer or tax adviser. Our company launch service covers the website and search side.