Cyprus has a capital gains tax rate of 20%, which is lower than many other countries. Estimated payments for corporate income tax are due in equal installments on July 31 and December 31, with the final payment due on August 1 of the following year. The tax return is due on March 31 of the second year after the calendar year. The general corporate income tax rate is 12.5%, and the value-added tax rate is 19%. Non-residents do not have to pay withholding tax on dividends or interest, but there is a 10% withholding tax on royalties. Residents are exempt from withholding tax on dividends, but have a 17% withholding tax on interest and no withholding tax on royalties.
Cyprus Tax Brief
Time of Update 4/05/2026
Cyprus Corporate Income Tax (CIT)
General CIT Rate:
12.5
CIT Return Due Date:
Tax due on March 31 of the second year after the calendar year.
CIT Payment Due Date:
The relevant tax is due on August 1 of the year following the calendar year.
CIT Estimated Payment Due Date:
Payment in installments of equal amounts on July 31 and December 31 of the relevant tax/calendar year.
Cyprus Withholding Tax (WHT)
Resident Withholding Tax (Dividend/Interest/Royalty):
0/17/0
None-Resident Withholding Tax (Dividend/Interest/Royalty):
0/0/10
Cyprus Value-Added Tax (VAT)
General VAT Rate:
19
Learn More
Cyprus Capital Gain Tax (CGT)
General Capital Gain Tax Rate:
20
Cyprus Effective Tax Rate (ETR)
Composite Effective Average Tax Rate:
11.4%
Composite Effective Marginal Tax Rate:
5.92%
Additional info
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TKEG Expat Cyprus Corporate Tax Guide
Cyprus Corporate Income Tax
Cyprus Withholding tax (WHT) rates
Cyprus Labor Tax
Cyprus Duties
Cyprus Personal income tax (PIT)
1.
Cyprus Corporate Income Tax
Standard Corporate Income Tax Rate:
Cyprus has a standard corporate income tax of 12.5%. All Cyprus tax resident companies are required to be taxed on their accrued income, regardless of whether it is sourced from within or outside Cyprus. Cyprus' corporate income tax law provides for tax exemptions for many incomes, profits and gains.
Special Contribution to National Defence (SDC)
Special Defence Contributions are only available for non-tax-exempt dividend income, "passive" interest income and rental income. Dividend income can be exempt from special defense contributions based on the participation exemption criteria.
Until June 2022, "passive" interest income, such as government bonds and foreign corporate bonds, should be paid to the Special Contribution to Defence at a rate of 3%. In addition, the Cyprus State Organization and Local Authorities, Pension Funds, Provident Fund and Cyprus Social Security Fund had a tax rate of 3% until 8 June 2022.
In terms of rent, in addition to the 12.5% corporate income tax, there is a special defence contribution of 3% (i.e. the effective tax rate of 2.25%).
Special Contribution to National Defence (SDC)
Special Defence Contributions are only available for non-tax-exempt dividend income, "passive" interest income and rental income. Dividend income can be exempt from special defense contributions based on the participation exemption criteria.
Until June 2022, "passive" interest income, such as government bonds and foreign corporate bonds, should be paid to the Special Contribution to Defence at a rate of 3%. In addition, the Cyprus State Organization and Local Authorities, Pension Funds, Provident Fund and Cyprus Social Security Fund had a tax rate of 3% until 8 June 2022.
In terms of rent, in addition to the 12.5% corporate income tax, there is a special defence contribution of 3% (i.e. the effective tax rate of 2.25%).
2.
Cyprus Withholding tax (WHT) rates
Withholding tax (WHT) rates in Cyprus differ for residents and non-residents. For resident corporations, dividends and interest are generally exempt from WHT, while 'passive' interest is taxed at 17%. Non-residents benefit from 0% WHT on dividends and interest, with a 10% rate on royalties if the rights are used within Cyprus. However, higher rates may apply if the recipient is from a jurisdiction listed on the EU blacklist.
3.
Cyprus Labor Tax
Payroll Tax:
In addition to the employer's own contributions to the employee's gross salary, the employer is also responsible for deducting the employee's contribution to the Social Insurance Fund, the General Health Care System (GHS) and the Pay-As-You-Go (PAYE) system from the employee's income.
Social security insurance:
Employed persons are compulsorily insured by the State Social Insurance Fund. Contributions to the fund are shared between the employee and the employer. Employers calculate their contributions as a percentage of the employee's earnings. Employers also contribute to other funds as listed in the table below:
Social security insurance:
Employed persons are compulsorily insured by the State Social Insurance Fund. Contributions to the fund are shared between the employee and the employer. Employers calculate their contributions as a percentage of the employee's earnings. Employers also contribute to other funds as listed in the table below:
- social insurance fund: 8.3%;
- unemployment insurance: 1.2;
- training and development fund: 0.5;
- social solidarity fund: 2.0;
- general health system contribution: 2.90;
- Vacation Fund (if not exempt): 8.0.
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