Cyprus Corporate Tax Rate 2026

Corporate Tax Rate – 2026

The statutory rate of Corporate Tax in Cyprus increases from 12.5% to 15%.

This amendment forms part of the Cyprus tax reform effective from 1 January 2026 and is consistent with earlier policy statements of the Cyprus Government.

Commentary – Alignment with International Tax Developments

The increase is also intended to align the Cyprus corporate tax rate with the emerging international standard of a 15% global minimum tax rate, as promoted through international tax reforms. By increasing the statutory rate to 15%, Cyprus reduces the likelihood that other jurisdictions will treat Cyprus as a low‑tax jurisdiction.

This is particularly relevant in the context of Controlled Foreign Company (CFC) rules applied by many countries, where foreign income may be attributed to the parent company if the subsidiary is taxed at a rate significantly lower than the domestic tax rate. In many jurisdictions this threshold is often assessed by reference to whether the foreign tax rate is below approximately 50% of the domestic corporate tax rate.

By aligning its statutory rate with the 15% international benchmark, Cyprus strengthens its position as a competitive but internationally compliant tax jurisdiction.

This publication should be read together with our earlier analysis of the Cyprus corporate and individual income tax framework:

👉 Corporate and Individual Income Tax in Cyprus

Interaction with the previous Cyprus tax framework

The previous Cyprus corporate tax framework, including the rules applicable before 1 January 2026, remains relevant for understanding the legislative change and the historical development of the Cyprus tax system.

Readers may therefore wish to review our earlier publication together with this update.

For the previous Cyprus corporate tax framework, see our earlier publication on:

👉 Corporate and Individual Income Tax in Cyprus