New Corporate Tax in Cyprus and Abolition of the 60-Day Rule from 2026

For years, Cyprus has been a favored destination for businesses and entrepreneurs seeking a favorable tax environment. However, starting in 2026, significant changes will come into effect to modernize the country's tax framework and align it with international standards. These reforms primarily affect corporate tax rates and the 60-day rule for tax residency. In this article, we explore the impact of these changes and the benefits they offer.

Increase in Corporate Tax to 15%

Currently, the corporate tax rate in Cyprus stands at 12.5%. From 2026, this rate will rise to 15%. When combined with the NHS contribution of 2.1%, the total tax burden for businesses will reach 17.1%.

This adjustment is part of a global trend to introduce a minimum corporate tax rate and aims to strengthen Cyprus' international tax competitiveness. Despite the increase, Cyprus remains one of the most attractive European countries for corporate taxation, with rates still lower than many other EU member states.

Abolition of the 60-Day Rule for Tax Residency

Until now, an individual could obtain tax residency in Cyprus by spending at least 60 days per year in the country, while not being a tax resident in another state and maintaining a permanent home in Cyprus. This rule will be abolished as of 2026.

Instead, tax residency will now be determined based on an individual’s center of life or economic interests. This means that individuals who have their primary residence or conduct significant business activities in Cyprus can obtain tax residency without being required to stay for a minimum number of days.

Benefits of the New Regulations

The 2026 tax reform presents both challenges and several advantages:

• International Compliance: The increase in corporate tax aligns Cyprus with global tax reforms and enhances its reputation as a legitimate tax jurisdiction.
• Greater Flexibility for Entrepreneurs: The abolition of the 60-day rule simplifies the process of obtaining tax residency, as there is no longer a minimum stay requirement.
• Continued Attractiveness for Investors: Despite the corporate tax increase, Cyprus remains one of the most tax-competitive countries in Europe.

Conclusion

The planned amendments to Cyprus' tax laws from 2026 mark a significant step toward greater tax transparency and international competitiveness. While businesses will face a slightly higher tax burden, entrepreneurs and investors will benefit from more flexible criteria for tax residency. Cyprus will therefore remain a prime destination for business creation and investment opportunities in Europe.

Are you considering moving to Cyprus, investing in real estate, or setting up a business on the island? Feel free to contact us – we are here to support you every step of the way!