🇨🇾 Tax22 Dec 2025
Cyprus raises corporate tax to 15% and ends deemed dividend distribution from 2026
Cyprus's House of Representatives passed a tax reform package on 22 December 2025, published on 31 December and mostly in force from 1 January 2026. The corporate income tax rate rises from 12.5% to 15% from tax year 2026. Deemed dividend distribution is abolished for profits from 2026, the special defence contribution on dividends falls to 5% in most cases, stamp duty is abolished and tax losses can be carried forward for seven years instead of five.
The reform followed a long public consultation and is set out in several amending laws.
What changed
- Corporate tax: 15% from tax year 2026, up from 12.5%.
- Deemed dividend distribution: abolished for profits from 1 January 2026. It still applies to undistributed 2024 and 2025 profits until 31 December 2027.
- Dividends: the special defence contribution on dividends falls from 17% to 5%, except for payments to related companies in blacklisted jurisdictions, which stay at 17%.
- Losses: carry-forward extended from five to seven years.
- Stamp duty: abolished for documents signed from 1 January 2026.
Who is affected
Cyprus companies, including holding and treasury companies, and their shareholders.