Cyprus: Tax

The Cyprus Tax Department has issued new guidance extending the examination period for pending VAT declarations and clarifying transitional provisions for the reduced 5% VAT rate on primary residence acquisitions and construction. Key deadlines and eligibility criteria have been established for properties with planning permits issued or applied for by October 31, 2023.

For international businesses with UAE operations, the Cyprus UAE holding structure has moved from a niche advisory conversation to a mainstream planning consideration.

Cyprus has introduced a 15% corporate tax rate effective January 2026, aligning with OECD's Pillar Two framework while maintaining competitive advantages. The reform includes reduced Special Defence Contribution on dividends, wider personal income tax bands, and a clear framework for crypto asset taxation, positioning Cyprus as an attractive international business hub.