15% corporate.Zero on inheritance.Seventeen non-dom years.

Key tax highlights

Corporate tax is levied at a flat 15%, one of the lowest rates in Europe. Personal income is taxed progressively up to 35%, but the first €22,000 of annual income is entirely tax-free. Dividend and interest income are fully exempt from income tax, and Cyprus imposes no inheritance, wealth or gift tax.

Cyprus also maintains an extensive network of over 60 double taxation agreements (DTAs), helping prevent double taxation and reduce withholding taxes on cross-border payments. Combined with EU legal standards, investor protections and straightforward residency rules, this makes Cyprus highly attractive for residents and international investors alike.

• ◆Low corporate tax | flat 15% rate, below the EU average
• ◆Generous personal allowance | first €22,000 of income is tax-free
• ◆Dividends and most interest income exempt from personal income tax
• ◆Non-domiciled residents pay 0% on dividends, interest and most capital gains (including foreign income) for up to 17 years
• ◆No death taxes | no inheritance or gift tax
• ◆Over 60 DTAs (UK, Germany, China and others) reducing cross-border tax

Personal income tax benefits for residents

EU citizens: nationals of EU/EEA member states can move to Cyprus freely without a visa. Once they become Cyprus tax residents they enjoy full access to the incentives, including the non-domicile regime which exempts foreign dividends and rental income from taxation, the same pension-friendly rules as other residents, and no inheritance or gift tax.

Non-EU investors: non-EU nationals must obtain residency, commonly by purchasing real estate. Once tax-resident they are treated much like EU residents. Newcomer workers earning €55,000 or more per year from Cyprus employment receive a 50% personal income tax exemption for 17 years; lower salaries can benefit from transitional relief up to €8,550 per year. Non-EU investors also enjoy the non-dom exemptions: 0% tax on dividends, interest and capital gains for 17 years.

• ◆€0 – €22,000 · 0%
• ◆Top marginal rate · 35%
• ◆50% exemption on employment income above €55,000, for 17 years
• ◆Tax residency via the 183-day rule or the 60-day rule

Retirees

Cyprus tax residents must report worldwide pension income but can choose each tax year how it is assessed: either under the normal income tax bands (which start at 0% on income up to €22,000) or at a flat 5% on pension income exceeding €5,000. Most retirees opt for the 5% flat rate on foreign pensions, which is often more favourable.

Pension lump sums, such as retirement gratuities or one-off withdrawals, are not taxed in Cyprus. With no inheritance or gift tax, access to public healthcare and a high quality of life, Cyprus ranks among Europe's top retirement destinations for EU and non-EU nationals alike.

Digital nomads

Individuals who qualify as Cyprus tax residents (over 183 days, or via the 60-day rule) enjoy the island's full tax benefits: 0% tax on dividend income and capital gains, except gains from selling Cyprus real estate.

Cyprus also grants a 50% income tax exemption on foreign-earned income above €55,000 for up to 17 years. A nomad earning €70,000 abroad would therefore be taxed normally on only half of the excess. Combined with the climate and EU-level safety, it is a compelling hub for location-independent professionals.

Corporate tax advantages

All Cyprus-resident corporations pay 15% corporate tax on worldwide profits, with many expenses and investments deductible. Cyprus does not levy withholding taxes on dividends or interest paid to foreign shareholders, so profits can be repatriated or reinvested across borders with minimal extra tax.

There is no withholding on most royalties paid abroad, and the DTA network further reduces tax on cross-border interest and royalties. Qualifying intellectual property income can be taxed at an effective rate as low as 2.5% under the Cyprus IP Box regime, and special tonnage regimes apply to shipping.

Residential property

New primary residences qualify for a reduced 5% VAT (instead of the standard 19%) on the first €350,000 of the purchase price, up to 130m², provided the total value does not exceed €475,000, the area is under 190m², it is the buyer's first use of the scheme, and the property is used as their primary home for at least 10 years. These rules apply where the planning permit application was submitted after November 2024; earlier applications may still benefit from the previous rule allowing 5% VAT on the first 200m².

Cyprus abolished annual property taxes and has no inheritance tax, so primary homes can often transfer to heirs without tax. Only gains on Cyprus-situated property are taxed | foreign real estate sales incur no Cyprus tax.

Investment property

Rental income is taxed under normal income rules, but owners may deduct most related expenses such as maintenance, management fees and mortgage interest, which reduces the tax burden on rental yields. The double tax treaty network ensures rental income is generally taxed only once, depending on treaty terms.

On sale, Cyprus levies a 20% capital gains tax on profit derived from Cyprus-located immovable property. No capital gains tax applies to the sale of shares in companies owning foreign property, or to assets located outside Cyprus.

Buying through Domenica Group

Domenica Group offers an in-house legal team and long-standing partnerships with top Cypriot law firms, so every transaction is handled by experts who understand Cyprus tax and residency rules from day one. Our specialists stay current with the latest regulations, so there are no unexpected issues or hidden surprises.

In practice, foreign buyers, retirees and digital nomads benefit from smooth, tax-efficient purchase structuring and expert assistance in claiming the exemptions available to them.