Breaking news

Cyprus Introduces Broad Personal Tax Reform From 2026

Modernizing A Global Tax Hub

Cyprus has introduced a broad overhaul of its tax framework effective January 1, 2026, aimed at strengthening the country’s position as an international business and investment hub. The reform updates personal taxation rules, expands targeted exemptions and modernizes existing reliefs in an effort to attract internationally mobile professionals, foreign executives and high-net-worth individuals.

Redefining Tax Residency

The revised regime maintains Cyprus’ existing residency structure while clarifying the criteria under which individuals qualify as tax residents. Under the updated Income Tax Law of 2002, tax residency can be established either through the traditional 183-day test or the alternative 60-day test.

183-Day Test

Individuals physically present for an aggregate of 183 days or more within a calendar year are automatically classified as Cyprus tax residents. Consequently, their worldwide income is subject to Cypriot taxation, irrespective of remittance.

60-Day Test

This alternative residency criterion applies to those who have not established tax residency in another country. To qualify under the 60-day test, an individual must:

  1. Maintain a permanent residence in Cyprus;
  2. Carry out a business or be employed with a Cyprus-based entity for the entire period; and
  3. Be physically present in Cyprus for no less than 60 days during the tax year.

Statutory rules clearly delineate how days are counted, guaranteeing consistency for both the 183-day and 60-day tests.

Progressive Income Tax And Exemptions

The reform introduces updated progressive tax bands, which are applicable as follows:

Income Band Tax Rate
Below €22,000 0%
€22,001 to €32,000 20%
€32,001 to €42,000 25%
€42,001 to €72,000 30%
€72,001 and above 35%

Additional exemptions, such as those on dividend income, securities gains, certain export remunerations, and select foreign exchange gains, further streamline the tax liability for qualifying individuals.

Enhancing Competitiveness Through The Non-Dom Regime And Employment Incentives

A cornerstone of Cyprus’ personal tax framework is its non-domicile regime, which has been prominent since 2015. The regime offers significant tax relief through exemptions from special defence contributions on passive income. Notably, individuals not deemed domiciled in Cyprus benefit from full exemption until they complete 17 years of residency, preserving favourable long-term conditions.

Employment Income Tax Exemptions

Further bolstering its reputation as a magnet for global talent, Cyprus provides tiered tax exemptions for foreign employees. Key highlights include:

  • A 50% exemption for high-income first employment, applicable to those earning over €55,000 annually who have not been local residents for the preceding 15 years; this relief lasts for 17 tax years.
  • A 20% exemption for mid-level foreign employees transitioning from non-resident employment, with a cap of €8,550 per annum over seven tax years.
  • A 25% “brain gain” exemption, designed to attract skilled professionals, which applies for up to seven tax years and is available only once in a lifetime.

Legacy exemptions continue to benefit those whose employment commenced under previous statutory frameworks, maintaining continuity and stability for long-term stakeholders.

Innovations In Equity-Based Remuneration And Broader Employment Benefits

The reform further introduces preferential taxation for employee share option plans and share awards, applying an 8% tax rate to qualifying long-term incentive schemes. Authorities said the measure aligns executive remuneration structures more closely with international practices. At the same time, the broader definition of taxable employment income now incorporates pre-employment bonuses and selected contractual termination benefits, helping clarify the legislative framework.

Supporting Family Welfare And Sustainable Investments

Beyond executive and corporate taxation, the reform package also includes measures designed to support households and environmentally focused investment activity. Enhanced deductions linked to children, housing relief and investments in electric vehicles and renewable energy projects form part of the updated framework.

Conclusion

The overhaul of Cyprus’ personal tax framework reinforces the country’s broader strategy of attracting international investment, executive mobility and globally mobile professionals. Updated residency criteria, revised tax bands, non-dom provisions and expanded employment incentives collectively strengthen Cyprus’ position within the European market.

Athens And Nicosia Still Offer Some Of Europe’s Most Affordable Apartments, Despite Rising Prices

Housing costs in Nicosia remain well below those in most western European capitals, according to new data from Global Property Guide, highlighting the wide gap in residential property prices across Europe.

Nicosia And Athens Remain Among Europe’s More Affordable Capitals

The latest figures from Global Property Guide, which tracks residential property markets across 88 countries, show that both Nicosia and Athens remain among Europe’s more affordable capital cities, despite years of steady price growth.

In Cyprus, the median asking price for a one-bedroom apartment in Nicosia stands at €145,000. Two-bedroom apartments are priced at €205,000, while three-bedroom homes reach €280,000.

That places Nicosia slightly above Athens in the one-bedroom category, where the Greek capital records a median asking price of €135,000. For two-bedroom and three-bedroom apartments, however, prices are identical in both cities at €205,000 and €280,000, respectively.

Western Europe Commands A Premium

Athens also remains relatively affordable by European standards. Median asking prices for one-bedroom apartments reach €174,000 in Warsaw, €240,000 in Madrid, €310,000 in Milan and €325,000 in Berlin.

The gap is even more pronounced in Western Europe, where one-bedroom apartments cost around €440,000 in both Paris and Lisbon, more than three times the price seen in Athens.

The difference becomes even greater for larger homes. A three-bedroom apartment carries a median asking price of €280,000 in both Athens and Nicosia, compared with €685,000 in Lisbon, €690,000 in Milan, €845,000 in Berlin and €1.08 million in Paris.

For two-bedroom apartments, the contrast is equally striking. While homes are priced at €205,000 in Athens and Nicosia, equivalent properties cost €380,000 in Madrid, €455,000 in Milan, €527,000 in Berlin, €620,000 in Lisbon and €695,000 in Paris.

Europe’s Most Expensive Property Markets

Global Property Guide’s data also highlights the wide variation in residential property prices across Europe.

Zurich is the continent’s most expensive market for a one-bedroom apartment, with a median asking price of €1.151 million. It is followed by Luxembourg (€669,000), Copenhagen (€601,000), Munich (€548,000) and London (€522,000), while Paris and Lisbon are both priced at around €440,000.

The Most Affordable Cities

At the other end of the market, the lowest asking prices are concentrated in south-eastern and eastern Europe. Median asking prices for a one-bedroom apartment stand at €125,000 in Riga, €118,000 in Podgorica, €110,000 in Bucharest, €103,000 in Sarajevo and €79,000 in Chisinau.

According to the report, Skopje is Europe’s most affordable capital for one-bedroom apartments, with a median asking price of just €55,000.

Aretilaw firm
Uol
The Future Forbes Realty Global Properties
eCredo

Become a Speaker

Become a Speaker

Become a Partner

Subscribe for our weekly newsletter