Retirement and employment incentives
RETIREMENT
Qualifying foreign pensions
PwC reports an option for qualifying foreign pensions to be taxed at 5% on the annual amount exceeding €5,000, rather than at the regular progressive rates. Eligibility and the annual election are subject to review.
INTERNATIONAL TALENT
Employment concessions
Some qualifying first employments in Cyprus may receive a 50% remuneration exemption subject to the published income threshold, periods of prior non-residence and other strict conditions. Other partial exemptions may apply.
BUSINESS OWNERS
Corporate tax and dividend reform
From 1 January 2026, standard corporate income tax is 15% (previously 12.5%). At the same time, Special Defence Contribution on qualifying dividends received by Cyprus tax-resident and domiciled individuals was reduced from 17% to 5%. Transitional rules and domicile status matter.
Corporate tax, dividend distributions and the 2026 reform
From 1 January 2026, Cyprus increased its standard corporate income tax rate from 12.5% to 15%. The same reform reduced Special Defence Contribution (SDC) on qualifying dividends from 17% to 5% for individuals who are Cyprus tax-resident and domiciled. Dividends paid by Cyprus companies from profits earned up to 31 December 2025 remain subject to a 17% SDC transitional regime if distributed on or before 31 December 2031. Cyprus tax-resident individuals who qualify as non-domiciled generally remain exempt from SDC on dividends. GeSY contributions, anti-avoidance rules and shareholders’ individual circumstances may still affect the overall tax outcome.
Other 2026 changes include the abolition of the deemed dividend distribution regime for profits earned from 2026 onwards, subject to transitional treatment for earlier years. These changes to companies and shareholder taxation are separate from the immigration residency programme.
An extensive international double-taxation treaty network
Cyprus has concluded double-taxation treaties covering more than 65 countries and jurisdictions, including major European economies and international business markets. These agreements generally seek to prevent the same income being taxed twice by coordinating each country’s taxing rights and allowing relief in eligible circumstances. Actual benefits depend on the applicable treaty, its effective status, the taxpayer’s residency, beneficial ownership, anti-abuse requirements and the type and source of income. Benefits cannot be assumed merely from owning property or establishing a company in Cyprus.
The treaty network is regularly updated; buyers should consult the official Cyprus Ministry of Finance treaty register and seek professional cross-border advice for the specific countries involved.
Sources for the 2026 reforms and tax treaties: PwC — Enacted Tax Reform 2026, including dividend transitional rules · KPMG — Cyprus international tax rules and treaties · Ministry of Finance — Official tax treaty register
Buying and selling residential property
Buyers should evaluate VAT and title-transfer costs separately from personal taxation. Stamp duty was abolished from 2026. Cyprus also applies capital gains tax to relevant gains from disposals of Cyprus immovable property; updated 2026 lifetime CGT exemptions include up to €150,000 for an eligible principal residence, subject to restrictions, as well as other exemption thresholds. This is not a blanket exemption for every property sale.
A home for people who travel and work internationally
A VESTA LIVING property may suit professionals, entrepreneurs, retirees or families seeking a Mediterranean base while remaining connected to international business and family networks. However, tax residence, immigration permission and working rights must be assessed as separate questions before any relocation decision.
