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Income tax in Cyprus 2026
The 2026 reform lifted every band: nothing is due on the first EUR 22,000 and the 35% rate now waits until EUR 72,000 — previously EUR 60,000.
New arrivals do far better still: a first-time Cyprus employee earning over EUR 55,000 can exempt 50% of salary for up to 17 years.
At a glance
- top rate
- 35% above EUR 72,000
- entry band
- 0% on the first EUR 22,000
- tax year basis
- Calendar year
- filing deadline
- 31 July of the following year; provisional tax on non-wage income due 31 July and 31 December in-year
- residency basis
- Worldwide for residents — 183 days, or 60 days with a home and job or business in Cyprus
- regime flag
- 50% exemption (EUR 55,000+, 17 years) or 20% exemption (max EUR 8,550, 7 years) for new residents
Rates
Income tax scale (2026)
| Taxable income (EUR) | Rate on this band | Note |
|---|---|---|
| 0 – 22,000 | 0% | Raised from EUR 19,500 |
| 22,001 – 32,000 | 20% | |
| 32,001 – 42,000 | 25% | |
| 42,001 – 72,000 | 30% | |
| Over 72,000 | 35% | Previously started at EUR 60,000 |
Marginal rates apply within each band.
Special flat rates (2026)
| Rate | Base | Applies to |
|---|---|---|
| 8% | Benefit value | Employee share options and share-acquisition rights, up to twice the year's salary — excess at scale rates |
| 20% | Excess over EUR 200,000 | Termination, retirement and ex gratia payments above the EUR 200,000 line |
| 5% | Amount over EUR 5,000 a year | Optional flat rate on foreign pensions |
| 20% | Amount over EUR 19,500 | Widow's or widower's Cyprus pension — or elect the normal scale |
Thresholds & allowances
- Child allowance (new 2026)EUR 1,000 / 1,250 / 1,500
Per spouse or cohabitee, for the first, second and each further dependent child (students count up to age 24); income thresholds apply — EUR 40,000 for singles
- Housing allowance (new 2026)Up to EUR 2,000
Per spouse, for mortgage interest or rent on a primary residence, subject to the income thresholds
- Green and insurance allowances (new 2026)EUR 1,000 + EUR 500
Per spouse: energy upgrades or a new electric vehicle (EUR 1,000) and natural-disaster home insurance (EUR 500)
- Insurance and pension deductionsUp to 1/5 of income
Life insurance premiums, pension, provident and medical fund contributions combined; life cover capped at 7% of the insured sum
- Innovative business investmentUp to EUR 150,000 a year
30–50% of a qualifying investment in an innovative small or medium business, deductible until end-2026
Residency
Residency trigger
You are resident after 183 days in the calendar year — or after just 60 days if you keep a home in Cyprus, work or run a business there, and no other single country hosts you for over 183 days.
Non-resident treatment
Non-residents pay Cypriot tax only on Cyprus-source income (employment exercised there, local pensions, rents and business profits) using the same scale and most of the same deductions.
Notes
- Salary earned abroad for a non-resident employer during 90+ days in the tax year is exempt entirely.
- Interest income is no longer touched by income tax at all from 2026 — only the separate defence contribution applies.
- 20% of rental income is exempt; the balance is taxed at scale rates, and the 3% defence contribution on rents is gone from 2026.
- Spouses are always taxed separately — Cyprus has no family unit concept.
- The 50% exemption requires 15 prior years outside Cyprus and first-year pay above EUR 55,000; the lighter 20% exemption (capped at EUR 8,550) needs only 3 years abroad.
- Everyone aged 25–70 must file a return from 2026 regardless of income; employees settle by 31 July self-assessment.
FAQ
What is the top income tax rate in Cyprus?
35%, and from 2026 it only starts above EUR 72,000; the first EUR 22,000 is tax-free.
How does the 50% expat exemption work?
Take up first employment in Cyprus after 15 consecutive years abroad with pay above EUR 55,000, and half your remuneration is exempt for up to 17 years — even if you change jobs within Cyprus.
How little time can make me tax resident?
Just 60 days, if you also keep a Cyprus home, have a local job, business or directorship, and don't spend over 183 days in any other country.
How are foreign pensions taxed?
You choose each year: the normal scale, or a flat 5% on everything above EUR 5,000.
Figures: tax year 2026, compiled from public sources. Not tax advice.