Cyprus tax free threshold: EUR 22,000 from 2026
The first band, what sits outside it entirely, and why it matters less than it looks.
Last verified 2026-10-22Next review 2027-01-222 official sources
Whether Cyprus works for you depends on how you earnTalk it through
Cyprus tax free threshold is EUR 22,000 of taxable income a year, from tax year 2026. It rose from EUR 19,500 in the December 2025 reform, and it is one of the few numbers in Cyprus tax that a lot of otherwise careful sources state incorrectly.
Cyprus tax free threshold, and the bands above it
| Taxable income | Rate |
|---|---|
| up to EUR 22,000 | 0% |
| EUR 22,001 to 32,000 | 20% |
| EUR 32,001 to 42,000 | 25% |
| EUR 42,001 to 72,000 | 30% |
| over EUR 72,000 | 35% |
It is a band, not an allowance that disappears: everyone gets the first EUR 22,000 at nil, whatever they earn above it.
The wrong number
EUR 22,500 appears on a surprising number of advisory pages and in most forum answers. It is not in the amending law. If a calculator you are relying on starts at EUR 22,500, everything downstream is out by EUR 500 of free band, and more importantly it tells you the source did not read the law.
What never reaches the threshold at all
- Dividends, exempt from income tax under section 8(20).
- Interest income of individuals, exempt from income tax from 2026 and charged to the defence contribution instead.
- Gains on securities other than Cyprus property-rich shares, exempt under section 8(22).
- Crypto disposals, taxed at a flat 8% in their own section.
Which is why a founder living on dividends can find the threshold almost irrelevant. It governs salary, self-employed profit, pensions and rent.
What still comes off a small salary
The threshold is income tax only. Social insurance at 8.8% for an employee and 16.6% for a self-employed person is collected from the first euro, up to a ceiling of EUR 68,904 for 2026. The health contribution at 2.65% or 4% likewise.
So a EUR 20,000 Cyprus salary pays no income tax and still carries contributions. "Tax free" is accurate about one of the three charges.
Stacking it with an exemption
For someone new to Cyprus on a salary above EUR 55,000, the 50% exemption comes off first and the bands apply to what is left. On EUR 100,000 that means EUR 50,000 taxable, of which the first EUR 22,000 is at nil. The two work together rather than one replacing the other.
The bands are in Law 244(I)/2025, section 24(a).
Common questions
- What is the Cyprus tax free threshold?
- EUR 22,000 of taxable income a year from tax year 2026, raised from EUR 19,500.
- Is it EUR 22,500?
- No. That number circulates widely and is wrong. Law 244(I)/2025 sets it at EUR 22,000.
- Does it apply to dividends?
- It does not need to. Dividends are exempt from income tax entirely under section 8(20), so they never reach the bands.
Whether Cyprus works for you depends on how you earn
Where you live is only half of it. We can walk through your position with you, including the cases where Cyprus tax residency does not give the result people expect. This is general information, not tax advice for your circumstances.
Sources
Every legal, fee and procedural statement on this page is taken from the sources below and was checked on 2026-10-22. Where they change, this page changes.
- Law 244(I)/2025 amending the Income Tax Law, Official Gazette No. 5070 of 31 December 2025 (cylaw.org) — 15% corporate tax, the 2026 60-day rule, personal tax bands and the 8% crypto rate, from 1 January 2026
- Income Tax Law 118(I)/2002, consolidated text (cylaw.org) — Tax residency (section 2), dividend exemption (section 8(20)), IP Box (section 9(1)(κ)) and rates
Related
This page is general information about Cyprus rules as published by the authorities named above. It is not legal or tax advice for your circumstances, and immigration outcomes depend on your nationality, documents and individual case. See our legal and tax information disclaimer.