Cyprus's taxes at a glance
| Tax on $50,000 of revenue | 15% to 25% |
|---|---|
| Tax on $100,000 of revenue | 15% to 25% |
| Effective rate at $100,000On profit, after costs of 15% | 17.3% Source: gov.cy, checked September 29, 2026. Computed: profit EUR 74,706, corporate tax EUR 11,206, dividend EUR 63,500, GHS EUR 1,683, total EUR 12,889 = 17.25% of profit. Self-employed in own name would be about 33.1% |
| Tax on $250,000 of revenue | 15% to 25% |
| Tax system | Worldwide |
| Foreign income, new residents | Partly exempt Source: gov.cy, checked September 29, 2026. Tax Department presentation of March 6, 2026 (Greek) |
| Social contributions, self-employed | 16.6% Source: mlsi.gov.cy, checked September 29, 2026. Social Insurance Services table for 2026 (January 5, 2026 to January 3, 2027): 16.6% on weekly income from EUR 331.14 to a maximum of EUR 1,325, so at most EUR 11,437.40 a year. Plus 4% GHS on income (capped at EUR 180,000) and 0.5% to the HRDA fund. A company owner who draws no salary pays none of these on dividends; dividends bear 2.65% GHS |
Structure used: Own Cyprus private company (Ltd) managed from Cyprus, founder takes no salary and receives all after-tax profit as dividends as a non-domiciled resident: 15% corporate tax, 0% special defence contribution, 2.65% GHS on dividends. Bands are the effective tax on profit for a remote worker using this structure, with clients abroad and costs of 15% of revenue.
Cyprus tax residency: the 183-day rule and the 60-day rule
Cyprus has 2 ways in, and you need only one of them for a tax year. Under the Income Tax Law as amended by Law 244(I)/2025, you are resident if you spend more than 183 days in Cyprus, or if you meet every condition of the 60-day rule:
- Days: at least 60 days in Cyprus in the tax year.
- Nowhere else for long: no more than 183 days in any other single country.
- A Cyprus tie: you carry on a business in Cyprus, are employed there, or hold an office in a Cyprus tax-resident company at some point in the year, and that is not ended before December 31.
- A home: you keep a permanent home in Cyprus, owned or rented.
Since 2026 the 60-day rule applies whether or not you are tax resident somewhere else, which makes Cyprus easy to join and, as the warning below explains, easy to share with another country. The rule has no partial credit: miss one condition and only the 183-day rule is left.
Using the 60-day rule: the version that holds and the one that fails
Holds
You spend 75 days a year in Limassol, rent an apartment on a 12-month lease, stay a director of your own Cyprus company through December 31, and spend no more than 150 days in any other country. Every condition is met, so you are resident and the Tax Department can certify it.
Fails
You spend 70 days in Cyprus in short-term rentals, resign as director in November, and spend 200 days in Portugal. You miss 3 conditions at once: no permanent home, no Cyprus office held to the end of the year, and more than 183 days in another country.
Cyprus income tax rates and contributions in 2026
Cyprus personal income tax scale from January 1, 2026, and what the self-employed pay on top
| Taxable income or item | Rate |
|---|---|
| Up to EUR 22,000 (about $25,000) | 0% |
| EUR 22,000 to EUR 32,000 (about $36,400) | 20% |
| EUR 32,000 to EUR 42,000 (about $47,800) | 25% |
| EUR 42,000 to EUR 72,000 (about $81,900) | 30% |
| Above EUR 72,000 | 35% |
| Social insurance, self-employed, on weekly income up to EUR 1,325 | 16.6% |
| GHS health contribution, self-employed, on income up to EUR 180,000 | 4% |
| Human Resources Development Authority fund, self-employed | 0.5% |
| Dividends and interest | Exempt from income tax; 2.65% GHS; no defence contribution for a non-dom |
Social insurance for the self-employed tops out at EUR 11,437.40 (about $13,000) a year under the Social Insurance Services 2026 table, and social insurance and GHS contributions are deductible from taxable income up to 1/5 of net income, together with life insurance and fund contributions. At $100,000 of revenue with costs of 15%, a freelancer invoicing in their own name pays about 33.1% of profit once income tax and contributions are added.
Foreign income for Cyprus residents
Cyprus taxes residents on worldwide business and employment income, so fees for work you do while living there are taxed in Cyprus whether your clients are local or abroad. Investment income is treated differently: dividends and interest are exempt from income tax and fall under the special defence contribution instead, which a non-domiciled resident does not pay under the 2025 amendment to the Special Defence Contribution Law. What is left is the 2.65% GHS contribution, charged on income up to EUR 180,000 (about $205,000) a year.
David's note
If you plan to use the 60-day rule, I would treat each condition as something to prove rather than assume: a lease that covers the whole year, company records showing the directorship ran to December 31, and a day count for every other country you spent time in. The rule is generous, but a tax office asking about it will want paper, not intentions.
What a Cyprus resident files
Cyprus filing checklist for a self-employed resident or company owner
- Register with the Tax Department; from tax year 2026, returns are filed only on the Tax For All platform.
- File the annual income tax return: the law sets July 31 of the following year, and the 2025 deadline has been extended to October 31, 2026.
- If you are self-employed, pay social insurance of 16.6% on weekly income up to EUR 1,325 (about $1,510), plus 4% GHS and the 0.5% HRDA contribution.
- Register for VAT once taxable transactions over the previous 12 months pass EUR 15,600 (about $17,700), or will within the next 30 days.
- Keep the evidence for the residence rule you rely on: day counts, a lease or deed, and company records.
Ways to move to Cyprus
| Route | Minimum income or investment | Permit length | Makes you tax resident | Status |
|---|---|---|---|---|
| Cyprus Digital Nomad Visa (temporary residence permit) Source: gov.cy, checked September 29, 2026Digital nomad visa | €3,500 (about $3,980) a month Source: gov.cy, checked September 29, 2026. Stable monthly net income of at least EUR 3,500 (about $3,980) after contributions and taxes | 12 months, renewable | With enough daysNo tax break: holders become tax resident under the normal 183-day or 60-day rules and can then claim non-dom status. | Open |
Special tax regimes in Cyprus
Non-domiciled resident exemption from the special defence contribution
A tax resident who is not domiciled in Cyprus pays no special defence contribution on dividends and interest. Because dividends and interest are also exempt from income tax, a non-dom pays only the 2.65% GHS health contribution on them. Status lasts until the person has been resident 17 of the last 20 years.
Open to new applicants. Lasts up to 17 years. Source: gov.cy, checked September 29, 2026 No application window; claimed through the tax return.
Paid extension of non-dom status (alternative SDC payment)
From 2026 a person without a Cyprus domicile of origin who would become domiciled under the 17 of 20 years rule can keep non-dom treatment for 2 more 5-year periods by paying a fixed defence contribution.
Open to new applicants. Lasts up to 10 years. Source: gov.cy, checked September 29, 2026 Apply to the Tax Commissioner by 30 June of the first year of each 5-year period.
50% exemption on employment income above EUR 55,000
New residents who take a Cyprus job paying more than EUR 55,000 a year are taxed on only half of it for 17 years. It applies to employees only, not to the self-employed or to dividends.
Open to new applicants. Lasts up to 17 years. Source: taxsummaries.pwc.com, checked September 28, 2026 Claimed through payroll and the tax return.
20% exemption on employment income, up to EUR 8,550 a year
New residents who take up a Cyprus job after working for a foreign employer can exempt 20% of their pay, capped at EUR 8,550 a year, for 7 years. Employees only.
Open to new applicants. Lasts up to 7 years. Source: taxsummaries.pwc.com, checked September 28, 2026 Claimed through payroll and the tax return.
Running your own company while living in Cyprus
A company is Cyprus-resident if it is managed and controlled in Cyprus, and from 2026 a Cyprus-incorporated company is resident by default unless a tax treaty says otherwise, under Law 244(I)/2025. A foreign company you run from Limassol is therefore a Cyprus company for tax, paying 15% on its profit.
The structure most founders use is a Cyprus company owned as a non-dom, with profit paid out as dividends. On $100,000 of revenue and $85,000 of profit, 15% corporate tax plus the 2.65% GHS on the dividend comes to about 17.25%, roughly half of the 33.1% the same work costs invoiced in your own name.
Self-employed, own Cyprus company or foreign company run from Cyprus, for a non-domiciled resident
| What matters | Self-employed in your own name | Own Cyprus company, profit paid as dividends | Foreign company run from Cyprus |
|---|---|---|---|
| Tax on profit | Income tax 0% to 35% | 15% corporate tax | 15% Cyprus corporate tax, because it is managed from Cyprus |
| Tax when money reaches you | None, it is already yours | 2.65% GHS, 0% defence contribution | 2.65% GHS, 0% defence contribution |
| Social contributions | 16.6% social insurance (capped), 4% GHS, 0.5% HRDA | None on dividends beyond the GHS | None on dividends beyond the GHS |
| Total at $100,000 of revenue | About 33.1% of profit | About 17.25% of profit | About 17.25% in Cyprus, plus any tax where it is formed |
| Yearly running cost | Bookkeeping and the return | From about €3,600 (about $4,100) with the mandatory audit | Costs in the country of formation |
Forming a Cyprus company as a non-resident costs EUR 165 (about $188) at the Registrar of Companies, goes through a Cyprus lawyer so you need not travel, and needs a director, a company secretary and a registered office in Cyprus. The mandatory audit is what makes it expensive to keep, which is why the route rarely pays below a modest profit.
The company route also assumes you may work for your own Cyprus company. EU citizens can; the digital nomad permit covers work for foreign employers or foreign clients, so a non-EU founder needs a different basis for working in Cyprus.
US citizens living in Cyprus
Cyprus is on the IRS list of income tax treaty countries, but the US taxes its citizens on worldwide income wherever they live. Cyprus is not among the 31 countries with a US totalization agreement, so a self-employed American can owe Cyprus social insurance at 16.6% and US self-employment tax at 15.3% on the same profit, and the exclusion does not reduce the US part.
The non-dom company route also works differently for Americans. A Cyprus company a US citizen controls is a controlled foreign corporation, and its profit can be taxed in the US each year under the net CFC tested income rules, formerly GILTI, whether or not it is paid out.
The costliest Cyprus mistake: counting on the 60-day rule while still resident elsewhere
Meeting the 60-day rule does not end your old residence
Since January 1, 2026, the 60-day rule no longer requires you to be non-resident everywhere else. That makes it easier to become resident in Cyprus, and easier to be resident in 2 countries at once. If your old country still counts you as resident, the tax treaty between the 2 decides, and treaty tie-breakers usually look first at where you have a permanent home, so a family home kept abroad can hand the result to the other country.
Before relying on the 60-day rule, check your old country's own residence test and the treaty between it and Cyprus, and keep the evidence for both: a year-round lease or deed in Cyprus, your directorship record to December 31, and a day count for every country you spent time in.
Who Cyprus suits, and who it does not
Good fit
- Founders who move to Cyprus, run their own Cyprus company and take profit as dividends: about 17% of profit in total as non-doms, for up to 17 years (27 with paid extensions).
- Investors with foreign dividends and interest: no income tax and, as a non-dom, no defence contribution, only 2.65% GHS.
- People who can spend only 60 days a year in one place: the 60-day rule gives tax residency with a home and a Cyprus company directorship.
Poor fit
- Freelancers invoicing in their own name: progressive rates up to 35% plus 16.6% social insurance and 4% GHS come to about 33% of profit at $100,000 of revenue.
- Non-EU nationals who want the company route on the digital nomad permit, which covers work for foreign employers or foreign clients, not employment by a Cyprus company.
- Very small businesses, since every Cyprus company needs audited or reviewed accounts.
Recent tax and visa changes in Cyprus
Self-employed people pay a new 0.5% contribution to the Human Resources Development Authority fund on their weekly insurable income, on top of 16.6% social insurance and 4% GHS. mlsi.gov.cy
Tax reform in force: tax-free band raised to EUR 22,000 with new bands up to 35% above EUR 72,000; corporate tax raised from 12.5% to 15%; the 60-day rule no longer requires not being resident elsewhere; Cyprus-incorporated companies resident by default unless a treaty says otherwise. gov.cy
Special defence contribution on dividends cut from 17% to 5% for domiciled individuals (profits from 2026), deemed dividend distribution abolished for profits from 2026, SDC on rent abolished, and a paid non-dom extension of EUR 250,000 per 5-year period introduced. gov.cy
