Six charges, three authorities
Running a Cyprus company does not mean dealing with the tax. It means dealing with six charges that go to three different places on three different rhythms. That is why an overview is more useful than any single rate.
At company level sit corporate tax and VAT. On the way from the company to the owner sits the special defence contribution. With the owner sit income tax, social insurance and the GESY health contribution.
Corporate tax: 15 percent
The rate has been 15% on taxable profit since tax year 2026. Up to and including 2025 it was 12.5%. What changed behind that figure, and what stayed the same, is in the guide to the tax reform.
Three points that get overlooked more often than the rate itself:
- Losses carry forward seven years, up from five.
- The IP box exempts 80% of qualifying profit. Because the headline rate rose, its effective rate is now 3% rather than 2.5%.
- Deductible entertainment expenses rise to EUR 30,000, up from EUR 17,086.
There is no municipal trade tax on top of corporate tax. The 15% is the rate at company level.
The road from profit to owner
What decides here is not the size of the profit but the shareholder’s domicile.
- Contribution on dividends: 5% for profits arising from 1 January 2026. For profits up to 31 December 2025 it stays at 17%, provided they are drawn by 31 December 2031.
- Anyone resident but not domiciled in Cyprus pays none of it. What that means exactly, and how long it lasts, is in the non-dom guide.
- No income tax falls on dividends, whatever the domicile.
Deemed dividend distribution ends for profits from 2026. It still has a tail: 70% of 2024 profits count as distributed on 31 December 2026, and 70% of 2025 profits on 31 December 2027, at 17% each time.
Which of the two routes leaves more from the same profit, a salary or a distribution, is worked through in the comparison of salary and dividend.
Income tax: the bands
This covers salary and director pay, not dividends. Anyone paying themselves both a salary and a distribution from their own company has two separate calculations open, and they follow different rules.
VAT: 19 percent and four further rates
The standard rate is 19%. Alongside it sit 9%, 5% and 3%, plus zero-rated supplies, which are a different thing from exempt supplies. Which rate applies when, and the threshold at which you have to register, is in the VAT registration guide.
Two filings matter for the running work: the VAT return each quarter and the VIES statement each month for intra-community supplies. Both come out of the same invoices when the tax treatment is settled as the invoice is written: see VAT 4 and VIES.
Social insurance and GESY
A salary carries 15.4% employer contributions on top of gross, and 11.45% withheld from the employee’s gross. The contribution ceiling for 2026 is EUR 68,904 a year. GESY has a ceiling of its own at EUR 180,000, applied to total annual income rather than to the salary alone.
Self-employed people pay 16.6%, and they pay it on a notional minimum income assigned to their occupation rather than on actual profit. That particular rule surprises people regularly and is covered in the guide for the self-employed; the contribution rates in detail are in the payroll guide.
What does not exist
- No stamp duty. Law 239(I)/2025 repeals the Stamp Duty Laws of 1963 to 2024 with effect from 1 January 2026. Cost breakdowns that still count stamp duty on articles and share capital are out of date.
- No contribution on rents. Rental income falls under income tax only.
- No municipal trade tax on top of corporate tax.
Is Cyprus a tax haven?
No, and the question points the wrong way. Cyprus is an EU member state with VAT, social insurance, a duty to keep books and an audit duty above a threshold. The 15% corporate rate is exactly the global minimum that Cyprus implemented with the reform. That is not a special rate, it is the floor the OECD set.
What actually makes Cyprus cheap comes down to three things, and none of them is the headline rate:
- The non-dom status. Someone resident but not domiciled pays no contribution on dividends and interest. For a shareholder who mostly takes distributions, that is the single largest item.
- The tax-free amount of EUR 22,000. It sits above what many EU countries grant and bites hardest on smaller salaries.
- No stamp duty any more, no contribution on rents, no deemed distribution on new profits.
Against that stands what tends to get left out: social insurance for the self-employed on a notional minimum income rather than on profit, a monthly VIES statement, an audit duty, and the question of whether the management actually sits in Cyprus.
A worked example
The figures below illustrate the rates above. They are not an offer and not advice. Suppose a Cyprus company earns EUR 100,000 before director pay, and the owner is resident in Cyprus and not domiciled.
| Step | Amount |
|---|---|
| Profit before director pay | EUR 100,000 |
| Director salary | EUR 22,000 |
| Employer contributions on it, 15.4% | EUR 3,388 |
| Taxable profit | EUR 74,612 |
| Corporate tax, 15% | EUR 11,192 |
| Available to distribute | EUR 63,420 |
| Contribution on dividends as a non-dom | EUR 0 |
No income tax falls on the EUR 22,000 salary because it matches the tax-free amount exactly; the employee share of 11.45% is still withheld from it. For a domiciled shareholder the distribution would carry a further 5%, around EUR 3,171.
What this example does not show: GESY on total income, the cost of bookkeeping and audit, and whether your home country taxes the distribution a second time. Those three decide the outcome more often than the rate does, which is why the calculation belongs in front of your accountant rather than in a table.
Anyone stacking several companies calculates differently: the participation exemption and the treatment of share disposals are set out in the guide to the Cyprus holding company.
Who files what, and when
| What | When | Where |
|---|---|---|
| VIES statement | 15th of each month | Tax For All |
| Payroll, social insurance, GESY | end of the following month | Social Insurance Services and Tax Department |
| VAT return | 10th of the second month after quarter end | Tax For All |
| Provisional tax | 31 July and 31 December | Tax Department |
| HE32 annual return | within 28 days of its reference date | Registrar of Companies |
The full list including every annual return is in the deadline calendar. Nobody in Cyprus sends a reminder by email, ourselves included.
What does not make Cyprus cheap by itself
The rates decide nothing on their own. Three things determine whether the Cyprus calculation is the one that ends up applying:
- Tax residence. A Cyprus company moves nothing by itself. Where you are resident is decided by its own rules: see tax residence.
- Substance. A company registered in Cyprus but managed from elsewhere can be treated as resident where the management sits.
- The client’s country. Reverse charge, non-EU supplies and intra-community supplies follow the client, not you.
Which of those applies in your case is a question for your accountant, not for an overview page. What we supply here are the figures the conversation starts from.
What this overview does not cover
We have not checked an official source on inheritance and gift tax for this page, so nothing about it appears here. The same goes for capital gains tax on Cyprus property and for the special treatment of interest from certain government and listed securities. Anyone with one of those questions gets a sourced answer if they write to us, and we add it here afterwards.
If you would rather have the answer checked for your own case than work it out from the rates, tell us where you stand and we will put you in front of the right adviser: find an adviser for Cyprus. We are a software company and give no tax advice ourselves.