Cyprus

Personal income tax (PIT)

Cyprus PIT is imposed on the worldwide income of individuals who are tax residents in Cyprus. Individuals who are not tax residents of Cyprus are taxed only on certain types of income accrued or derived from sources in Cyprus.

The following table lists the PIT rates and bands applicable to individuals up to 31 December 2025: 

As from 1 January 2026, the following PIT rates and bands apply: 

Special Defence Contribution (SDC)

SDC is imposed only on dividend (including disguised dividend), interest (except active interest up to 31 December 2025), and rental income (only up to 31 December 2025) earned by individuals who are both Cyprus tax resident and Cyprus domiciled for the purposes of the SDC. 

For dividend (SDC rate of 17% for profits of tax years up to 2025, including certain grandfathering provisions or 5% for profits of tax years as from 2026) and interest income (SDC rate of 17%, except for interest income earned from Cyprus (and as from 1 January 2026, another Member State of the European Union) government bonds, Cyprus and foreign corporate bonds listed on a recognised stock exchange, or bonds issued by Cyprus (and as from 1 January 2026, another Member State of the European Union) state organisations or Cyprus or foreign local authorities listed on a recognised stock exchange, where a rate of 3% applies), SDC applies instead of PIT. Up to 31 December 2025, for rental income (SDC effective rate of 2.25%), SDC applies in addition to PIT. However, on 13 September 2023, the Cypress Tax Authority (CTA) issued a Circular pursuant of which rental income from self-catering accommodation that is rented out via online platforms will be treated, subject to certain conditions, as business income (therefore subject to PIT and exempt from SDC). 

Non-tax residents are exempt from SDC for all their income, whether earned from Cyprus or foreign sources. This exemption also applies to individuals who are Cyprus tax resident but not Cyprus domiciled for the purposes of SDC. Anti-abuse provisions apply.

An individual who does not have a 'Domicile of Origin' in Cyprus (as defined in the Wills and Succession Law) is only considered to be domiciled in Cyprus for SDC purposes when the individual has been a tax resident of Cyprus for a period of at least 17 years out of the last 20 years prior to the tax year in question. 'Domicile of Origin' is acquired at birth and, as a rule, is the same as the domicile of the father at the time of birth, and in exceptional cases of the mother. For those individuals with 'Domicile of Origin' in Cyprus, detailed rules are used to determine the individuals’ domicile status for SDC purposes.