What is the Cyprus corporate tax rate in 2026?
From 1 January 2026, Cyprus's corporate income tax rate is 15%, up from the long-standing 12.5%, under the Income Tax Law 118(I)/2002 as amended by the 2026 tax reform. The 15% rate applies to the worldwide profits of Cyprus tax-resident companies. A separate Pillar Two global minimum top-up tax applies only to large multinational groups with turnover over €750 million.
Key facts at a glance
- Standard rate
- 15% (from 1 January 2026)
- Previous rate
- 12.5% (until end 2025)
- Pillar Two top-up
- Large MNE groups (€750m+ turnover) only
- Authority
- Cyprus Tax Department (Ministry of Finance)
- Legal basis
- Income Tax Law 118(I)/2002 (2026 reform); Law 113(I)/2024 (Pillar Two)
What is the Cyprus corporate tax rate in 2026?
From 1 January 2026, the standard corporate income tax rate in Cyprus is 15%, raised from the 12.5% rate that applied for the previous two decades. The increase was enacted as part of the 2026 tax reform and applies to the worldwide taxable profits of companies that are tax-resident in Cyprus. A company is Cyprus tax-resident if it is managed and controlled in Cyprus.
Why did the rate rise to 15%?
The rise to 15% aligns Cyprus with the OECD and EU global minimum tax agenda (Pillar Two). It is separate from the Pillar Two top-up tax itself, which is governed by Law 113(I)/2024 and applies only to large multinational and domestic groups with consolidated annual turnover of at least €750 million. Most ordinary Cyprus companies simply pay the new 15% corporate rate.
What does the change mean for companies?
Cyprus companies should budget for tax at 15% on profits earned from 2026 onward and review forecasts, pricing and group structures accordingly. Cyprus retains attractive features — the notional interest deduction, the IP Box regime, participation exemptions and a wide treaty network — so the effective rate can be lower. Specialist advice helps you apply these reliefs correctly. This is general information, not tax advice.
Harris Koufettas
Managing Partner · Cyprus Bar R.N.4466 · Harris Koufettas & Associates LLC (R.N.655)
View profile →Need help with Cyprus corporate tax?
Talk to Harris Koufettas about the 15% rate, the available reliefs and structuring your Cyprus company.