A tax resident is defined by the law as a person who is in Cyprus for more than 183 days per calendar year. A legal entity is considered to be a tax resident if the management and control of the entity is exercised in Cyprus. Management and control suggests, among other factors, that the majority of the members of the Board of the Directors are resident in Cyprus and that the important decisions by the Board are taken in the Republic.

The Corporate Tax rate as of 01/01/2026 is at 15% and dividend income of resident individuals is subject to Special Defence Contribution at the rate of 5%, which is withheld at source if received from Cyprus Resident Companies. The Dividend income from abroad, if earned by resident persons, will be treated in the same way as dividend from sources in Cyprus. In this case the Special Defence Contribution will not be withheld at source and thus the resident person has to declare the dividend in order to be assessed. Relief for Double Taxation will be given as for any other foreign income.

Land Registry Fees

Land Registry fees are levied on the purchaser by the Department of Land and Surveys upon the transfer of immovable property and are as follows:

The Cyprus Parliament voted on the amendment of the Law of Value Added Tax of 2000 (95 (I)/2000), specifically regarding the requirements under which the reduced rate of VAT at 5% is granted to individuals purchasing their first property in Cyprus for their residence.

The following amendments of the Law have been approved:

1. Grace Period under which the old criteria remain in force:

The amended Law includes a provision granting a three-year grace period, under which the old criteria for the reduced VAT rate are applied, provided that:

a. the property has a Planning Permit or

b. a Planning Permit Application has been filed by the 31^stof October 2023

2. New conditions for the reduced VAT rate:
   a. For property of value above €475.000and total covered area[1] more than 190㎡ the VAT rate will be 19%.
   b. For property of value up to €475.000and total covered area up to 190㎡ 5% VAT rate will be applied for the first 130㎡ until the value of €350.000 and for the remaining covered area (60㎡) of the property until the value of €475.000, 19% VAT will be applied.
   c. For property of value up to €350.000and total covered area up to 130㎡, 5% VAT rate will be applied. 

 It is clarified that both criteria regarding the value and the covered area of the property must be met in order to apply for the reduced rate of VAT. 

The law also provides a special clause for persons with disability, who can apply for the reduced VAT rate for the first 190sq.m. covered area of their property, regardless of the total area of the property.

Capital Gains Tax (CGT), is imposed on any gain from the disposal of property situated in Cyprus at the rate of 20%. In the case of a first disposal there is an exemption of EUR 30,000 applicable, in the case of agricultural land the exemption is EUR 50,000, and  in the case of a disposal of the primary residence the exemption is EUR 150,000.

As part of the Cyprus Tax Reform effective from 1 January 2026, as a notable pro-business move, is the abolition of stamp duty on a broad range of contracts and instruments, significantly reducing transaction costs and improving market liquidity. 

For all agreements which were formed and signed by at least one of the parties before 1 January 2026, stamp duty is payable, calculated as per below: 

Agreements specifying a fixed amount: 

For all agreements and/or memorandum of agreements and/or all documents forming any agreement specifying any fixed amount, the stamp duty is calculated on the basis of the contract value  stated within the document in the following manner: 

For amounts between €1 – €5.000 the stamp duty payable is €0

For amounts between €5.001 – €170.000 the stamp duty payable is €1,50 for each amount of €1.000 or any part thereof.

For amounts exceeding €170.000 the stamp duty payable is €2 for each amount of €1.000 or any part thereof, with a maximum cap of €20.000.

Agreements not specifying a fixed amount:

 For agreements and/or memorandums of agreement and/or all documents  forming an agreement in which no fixed amount is specified the stamp duty payable is €34,00. On contracts with value between €1.00 – €5.000, the value of the stamp duty is zero.

 Penalties where the stamp duty is not paid within 30 days from execution in Cyprus:

 If the stamp duty is paid within six months after execution then for the unpaid stamp duty not exceeding €2.00, the unpaid amount must be paid plus €2.00;

 For the unpaid stamp duty exceeding €2.00 but being less than €35.00, the unpaid amount is payable plus a penalty of €35.00; and

 For the unpaid stamp duty exceeding €35.00, the unpaid amount is payable plus 10% on the amount of the stamp duty which exceeds €35.00.

If the stamp duty is paid after the expiration of six months from execution, the unpaid stamp duty is payable, plus double the amounts of the penalties specified above