Published: 13.08.2026
Cyprus’s tax reform took effect on 1 January 2026. It raised the tax-free threshold to €22,000, changed personal income-tax bands, retained reliefs for foreign individuals taking up first employment in Cyprus and introduced updated rules for dividends, non-domiciled residents and companies.
According to the sources, from 2026 the personal tax-free threshold increased to €22,000, while substantial employment-income reliefs remain available for some foreign individuals taking up their first employment in Cyprus. Cyprus tax residents who are not domiciled in Cyprus continue to benefit from exemption from special defence contribution on dividends and passive interest during the applicable non-dom period. At the same time, dividend and corporate-tax rules have changed, so the practical effect depends on the person’s income structure and whether they operate through a Cyprus company. The reform is most relevant to new employees, entrepreneurs, investors and people planning to become Cyprus tax residents.