Cyprus corporate tax 15 percent: what changed and when

Cyprus corporate tax 15 percent: what moved with it

The rate did not change alone. Four other things in the same reform package matter to a company owner:

• Tax losses now carry forward seven years instead of five.
• Stamp duty was abolished from 1 January 2026.
• Company residence gained a second test: a company incorporated in Cyprus is tax resident here unless a treaty says otherwise, alongside the older management-and-control test.
• Deemed dividend distribution is abolished for profits of tax year 2026 onwards, and a new constructive dividend rule charges 10% on company assets used privately by a resident shareholder.

The 3% that is real and the 3.5% that is not

The IP Box deducts 80% of qualifying profit from a qualifying intangible asset. That leaves 20% taxed at 15%, so an effective 3% on that profit. Before 2026 the same arithmetic gave 2.5%.

Figures of 3.5% circulate and are simply wrong. So is the framing that this is a rate for tech companies. It applies to qualifying intangible assets such as software copyright or a patent the company developed, the qualifying profit is cut down by the nexus fraction comparing your own research spend with total spend, and services billed to clients are taxed at the full 15%.

What 15% means for the money you take out

It is the rate your money actually meets, because the company pays it before any dividend exists. On EUR 200,000 of profit: EUR 30,000 of corporate tax, then nil income tax on the dividend, then nil defence contribution if you are non-domiciled, then 2.65% for health capped at EUR 4,770.

Roughly 17% of the profit in total. "0% on dividends" describes only the second step of four.

Is 15% still competitive

It is no longer the lowest headline rate in the EU, and anyone choosing Cyprus purely on the corporate rate should check Ireland, Bulgaria and Hungary before deciding. What Cyprus keeps is the combination: a flat rate, no withholding on dividends to non-resident shareholders in the general case, the non-dom treatment for the owner, and tax residency available on 60 days a year.

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