Cyprus

Tax System Overview

Cyprus is one of the most popular tax jurisdictions in the EU for expats, digital nomads, and holding companies, driven by its 12.5% corporate rate and the incredibly generous "Non-Domiciled" individual regime.

Corporate Taxation

The corporate tax rate is a flat 12.5%. Cyprus also offers a highly attractive IP Box regime, which can reduce the effective tax rate on qualifying intellectual property income to just 2.5%.

Capital gains on the sale of shares are fully exempt from tax. Dividend income is generally exempt from corporate tax, making it a very efficient holding company location.

The Non-Dom Regime

An individual who relocates to Cyprus and qualifies as a tax resident, but is not domiciled there (i.e., not born to Cypriot parents), is exempt from the Special Defence Contribution (SDC). Since the SDC is the mechanism that taxes dividends and interest, a Non-Dom pays 0% tax on worldwide dividend and interest income for 17 years.