Cyprus company tax rate: 15 percent, and the rate underneath it

Cyprus company tax rate: the headline

15%, flat, on every company, from tax year 2026. There is no small-company rate, no progressive scale and no sector rate. Losses carry forward seven years, up from five.

A company is Cyprus tax resident if it is managed and controlled here, or, from 2026, if it is incorporated in Cyprus under the Companies Law, unless a tax treaty says otherwise.

The 3%, stated accurately

The IP Box deducts 80% of qualifying profits from a qualifying intangible asset. Twenty per cent of that profit is taxed at 15%, so an effective 3%. Three conditions get dropped when this is sold:

• It applies to qualifying intangible assets, such as software copyright or a patent your company developed. It is not a rate for technology companies as a category.
• Qualifying profit is reduced by the nexus fraction, comparing your own research spend with the total spent on the asset. Buying IP in rather than building it cuts the benefit sharply.
• Everything else the company earns, including services billed to clients, is taxed at the full 15%.

So the real overall rate of a company with an IP Box asset is almost always well above 3%.

What the company does not pay

• Stamp duty, abolished from 1 January 2026.
• Withholding on dividends to non-resident shareholders, in the general case. The exceptions are 5% to a low-tax jurisdiction company holding over half, and 17% to an EU non-cooperative jurisdiction.
• Deemed dividend distribution on profits of tax year 2026 and after, abolished. It still applies to 2024 and 2025 profits, at 70% deemed distributed, 17%, and only for shares held by residents who are also domiciled.

The new charge nobody mentions

A constructive dividend rule charges 10% on the market value of company assets used privately by a resident shareholder or a connected person, and on transfers of company assets to them below value. The company car and the company apartment are the obvious cases, and it arrived in the same reform that abolished deemed distribution.

What it costs to run, next to what it saves

Accounts, a statutory audit and the tax returns, which Cyprus firms publish at roughly EUR 1,000 for a dormant company and EUR 2,100 to EUR 4,800 for an active one. Below roughly EUR 60,000 of annual profit those fixed costs usually outweigh the tax advantage over simply registering as self-employed at 16.6% social insurance and the ordinary bands.

The rate change is in Law 244(I)/2025, section 24(b).