The figure that held for fourteen years
From 2013 up to and including tax year 2025, Cyprus corporate tax stood at 12.5 %. Long enough that the number became part of how the country was described.
Since 1 January 2026 it is 15 %.
The change came through law 244(I)/2025, passed on 22 December 2025 and published in the Official Gazette of the Republic of Cyprus, First Annex No. 5070, on 31 December 2025. The intervention itself is as short as it gets: the text replaces the words “twelve and a half” with “fifteen” in the Income Tax Law.
Why the old figure is so persistent
This is one of those cases where knowing the right number is not enough, because you keep meeting the wrong one.
On 12 October 2026 we checked what Google serves above a search for registering a Cyprus company. At the top sits an AI summary, and in it:
Tax Rate: Standard corporate income tax is 12.5 %.
Alongside it in the same answer, an annual company fee of 350 EUR that has not existed since 2024, and a minimum share capital of 1 EUR that never existed.
In practice: if you take a figure from an overview, know the date of that overview. Ours sits under every article.
Who the rate reaches, and on what
Two cases, and the difference turns on residence, not on registration:
- A company tax resident in Cyprus is taxed on its worldwide income at 15 %.
- A non-resident company is taxed only on Cyprus-source income.
A company is resident where management and control are exercised in Cyprus, or simply because it was incorporated in Cyprus, unless a treaty provides otherwise. The detail is in the guide to Cyprus tax residency; why a registered office does not suffice is in the guide to substance and shell companies.
There is no municipal trade tax. The 15 % is the complete rate at company level, and that is one of the points where comparisons against countries with two-tier taxation regularly go wrong.
What moved along with the rate
A tax rate never stands alone. Three figures hang off it, and two of them are almost always missed.
The IP box is now 3 %, not 2.5 %. It still exempts 80 % of qualifying profit from intellectual property. One fifth is therefore taxed. One fifth of 15 % is 3 %; previously it was 2.5 %. The rule itself was not touched; its result changed all the same.
The notional interest deduction is worth more. It too was left alone, but it now works against a higher marginal rate and therefore saves more.
Losses carry forward for seven years, previously five.
Two smaller points: deductible entertainment expenditure rises from 17,086 EUR to 30,000 EUR, and the 120 % additional deduction for research runs to 2030, but cannot be combined with the IP box for the same asset.
Every change of the reform side by side is in the guide to the 2026 tax reform.
The road from profit to shareholder
The 15 % is only the first step. What follows is decided by domicile, not by the rate:
| Step | Non-dom | Domiciled in Cyprus |
|---|---|---|
| Profit | 100,000 EUR | 100,000 EUR |
| Corporate tax at 15 % | 15,000 EUR | 15,000 EUR |
| Defence contribution on the distribution | 0 EUR | 4,250 EUR (5 %) |
| GESY at 2.65 % | 2,252 EUR | 2,252 EUR |
| Reaching the shareholder | 82,748 EUR | 78,498 EUR |
The defence contribution on dividends is 5 % for profits from 2026, down from 17 %. For older profits up to 31 December 2025 it stays at 17 %, provided they are received by 31 December 2031. Who it reaches is set out in the guide to non-dom status, and whether a salary pays better instead is worked through in the comparison of salary and dividend.
When the tax falls due
The reform moved not only the rate but also the date.
The corporate tax return T.D.4 is due by 31 January of the second following year from tax year 2026, previously by 31 March. For tax year 2026 that means 31 January 2028. Payment of self-assessed tax moves to the same date; previously it fell on 1 August of the following year.
Alongside that, provisional tax runs in two instalments during the year. All the dates side by side are in the overview of Cyprus tax deadlines.
What we could not confirm
- The loss carry-forward: seven or ten years. The statutory text and PwC say seven, a KPMG publication says up to ten with conditions. We follow the statutory text.
- Whether the IP box rule itself was amended in 2026. We found no amendment, and the effective 3 % follows from that. It is a negative finding, not an official confirmation.
- Transitional cases with a non-calendar financial year. The tax year in Cyprus is the calendar year; how a differing financial year is treated in the year of the rate change we did not examine.
Why this matters for bookkeeping
A rate change is one-off work, but it exposes how many places the same number lives in: the reserve, the provisional payment, every calculation.
Volk Accountant keeps the rate in one place. The tax estimate applies it to profit as it stands and shows the reserve it suggests, together with a field for what you have already set aside. A rule change is then a change to one setting rather than to twelve spreadsheets.
Whether your case falls under the 15 % or under one of the special regimes is a question for someone who will put their name to the answer: Cyprus setup from one place.