The mistake people make most is treating "the Cyprus tax rate" as one number. It is at least three different charges, each aimed at a different taxpayer. A page quoting the wrong one looks just as confident as a page quoting the right one.
There is also no separate rate for foreigners. Cyprus taxes a company based on where it is managed and controlled, and the owner's passport does not change the rate. Work through the seven items below in order.
1. Name the taxpayer before you look up a rate
Start by writing down who the rate is for. Cyprus taxes the company on its profit. It taxes you separately on what you take out of the company or earn as an individual. Searches for "cyprus tax rates for foreigners" mix these together, which is why the answers contradict each other.
- The company: corporate income tax on profit
- You as a shareholder: tax on dividends and interest, which depends on your residence and domicile
- You as an employee or director: personal income tax, with a €22,000 tax-free band
Your search is almost certainly about the rate on the company, so the rest of this list starts there.
2. Use 15% for profits from 1 January 2026
The corporate tax rate is 15% from 1 January 2026, up from 12.5%. The change brings Cyprus into line with the OECD's global minimum tax work. The Cyprus Tax Department publishes the current position, and the OECD's global minimum tax page explains the international background.
Any page that still shows 12.5% as the current rate is out of date. Our guide to Cyprus company costs in 2026 covers the fees that come on top of the tax.
3. Work out what the rate applies to
The rate applies to taxable profit, not to the money coming in. Profit is income minus the costs the law lets you deduct. Two companies with the same sales can owe very different amounts of tax.
Here is a worked example using the old and new rates. Suppose a quote assumes €100,000 of taxable profit. At the old 12.5%, the tax is €12,500. At 15%, it is €15,000. One stale number opens a gap of €2,500 a year, and that gap multiplies across any five-year plan built on it.
This is arithmetic on an illustrative profit, not a forecast for your company. Get your real profit figure from your accountant.
4. Check which year the profit belongs to
Profit earned before 1 January 2026 and profit earned after it fall under different rules. The rate is one difference. Deemed dividend distribution is another. Those rules are gone for post-2026 profits, while the IP Box and Notional Interest Deduction survived the reform.
When comparing quotes, ask each adviser which tax year their numbers cover. A figure with no year attached is not usable.
5. Price the pay-out separately from the company tax
Paying 15% on profit inside the company does not finish the calculation. Getting the money to you is a second event. What you owe on it depends on your tax residence, your domicile and the form the payment takes.
- Non-dom status gives a 0% Special Defence Contribution on dividends and interest for 17 years
- That window can be extended in two five-year blocks at €250,000 per block
- Salary falls under personal income tax, not the dividend rules
The post on paying yourself from the company goes into more detail. For the wider picture, see the ClearCyprus home page and the blog.
6. Check where the company is managed and controlled
The rate only helps if the company is genuinely tax resident in Cyprus. The test looks at where decisions are really made, not where the paperwork sits. A Cyprus registration with every director deciding from abroad is a risk, not a saving.
Keep evidence of where board meetings take place and who signs off key decisions. Tax authorities elsewhere, including the UK's, can look at the same facts and reach their own view. Read those facts the way an examiner would.
7. Check the cost side before you assume a deduction
Profit depends on what you can deduct, and the line between a business cost and a personal one decides that. A company vehicle is the common trap. Read Buying or Importing a Car in Cyprus (2026): Costs, Rules and Traps before routing a car through the company.
With the deductions settled, the next step is a cash plan for tax payments. The post on building a cash calendar covers this.
Official processes in Cyprus are paper-heavy and happen in person. Expect appointments, certified copies and waiting. Build that time into the plan, because a delay in registration pushes back everything that depends on it. Company registration itself goes through the Registrar of Companies.
Confirm it before you act
Rules and thresholds change, and guidance online is often out of date. By the time you read this, parts of this page may be too. Take your seven answers to a licensed Cyprus adviser and ask them to check each one against the current rules. For an introduction to a vetted provider, use the ClearCyprus match and request a quote.
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*Written by Mario Lucas. Mario writes ClearCyprus, independent guides to relocating to Cyprus and doing business there.*
Common questions
What is the Cyprus company tax rate?
The corporate tax rate is 15% from 1 January 2026, up from 12.5%. It applies to a company's taxable profit. Confirm the current position with the Cyprus Tax Department or a licensed Cyprus adviser.
Is there a different Cyprus tax rate for foreigners?
No. A company is taxed on its tax residence and where it is managed and controlled, not on the nationality of its owner. What differs for foreign owners is the tax on pay-outs, which depends on their residence and domicile.
Is the Cyprus company tax rate still 12.5%?
No. The 12.5% rate applied before 1 January 2026. From that date the rate is 15%. A source quoting 12.5% as current is out of date.
Do I pay the 15% on my sales or my profit?
You pay it on taxable profit, which is income less allowable costs. Sales alone do not set the bill. Your accountant works out the taxable profit figure.
Is the tax on dividends part of the company tax rate?
No. Company tax and tax on dividends are separate charges. Non-dom status gives a 0% Special Defence Contribution on dividends and interest for 17 years, but your own residence and domicile decide whether it applies.
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