Cyprus Parliament Approves a New Tax Reform
The Cyprus Parliament has approved a series of important tax changes, set to take effect from 1st of January 2026, marking the first major updates to the tax system in over two decades.
Corporate Tax
The corporate tax rate will rise from 12.5% to 15%, reflecting the first adjustment in 23 years.
Family and Personal Tax Measures
- New family deductions will be introduced for children, aiming to support households.
- The tax-free threshold for individuals will increase from €19,500 to €22,000.
Other Tax Measures
- Deemed dividend distribution rules will be abolished.
- Special Defence Contribution on actual dividends will be reduced from 17% to 5%.
- The loss carry-forward period will be extended from 5 to 7 years.
These changes represent a significant update to Cyprus’s tax landscape, impacting both individuals and businesses across the island. We will continue to monitor developments closely and provide updates as more information becomes available.
How can we assist you?
With the upcoming tax changes taking effect from 1st of January 2026, SPL Audit Cyprus is ready to help individuals and businesses navigate the new framework. Our team is here to provide practical, tailored advice to ensure you remain fully compliant while optimising your tax position under the new regulations. Contact us here.