The Parliament of Cyprus will soon consider one of the most important economic packages in recent years — a large-scale tax reform project. Finance Minister Makis Keravnos announced that the draft laws are already with the Legal Service. The government intended to submit them for discussion before the beginning of November.
Speaking at a meeting of the Finance Committee, Keravnos stated that the goal of the reform is to maintain the stability of the economy and ensure a budget surplus next year.
“Tax reform is not a tool of social policy, however, it includes provisions related to family income, education, housing programs, and the transition to a ‘green economy,’” the minister noted.
What will change from January 1, 2026
It should be reminded that the tax reform will come into force in 2026 and will be the most extensive in recent decades (see our detailed report).
- New tax brackets will be introduced: income up to €20,500 will be tax-exempt; higher income will be taxed at rates of 20%, 25%, 30%, and 35%.
- Corporate tax will increase to 15%.
- For the first time, taxation of cryptocurrency assets will be introduced.
- Penalties for violations will rise to 300%, and the tax service will be able to freeze bank accounts and assets.
- The defence contribution will be abolished, and the dividend tax will be reduced to 5%.
- Tax benefits will be introduced for families, students, homeowners, and investments in energy efficiency.
According to the government, these measures aim to modernize the tax system, making it fairer and more resilient to economic risks.