Big News for Digital Nomads in Cyprus
The Cyprus Parliament has approved the 2026 state budget, which includes important tax changes starting January 1, 2026.
If you are a digital nomad living in Cyprus or run a Cyprus-registered company, this is important news.
For Digital Nomads (Tax Residents)
- Higher Tax-Free Income
The personal tax-free limit rises from €19,500 to €20,500 per year, so more of your income stays untaxed. - Possible Future Increase
It may rise further to around €22,000, with support for middle-income earners and families. - More Deductions
Extra deductions are available for children, students, rent or mortgage interest, home energy upgrades, and electric vehicles. - Non-Dom Benefits Continue
Eligible residents still pay 0% tax on foreign dividends and interest, keeping Cyprus attractive for international income.
For Digital Nomads with Cyprus Companies
- Corporate Tax Update
Corporate tax rises slightly from 12.5% to 15%, remaining competitive in the EU. - Simpler Dividend Rules
The “deemed dividend” rule is removed for profits after January 1, 2026, making business taxes simpler. - Lower Dividend Tax for Individuals
Tax on actual dividends drops from 17% to 5%, leaving more profit in your hands. - Rental Income Tax Removed
Rental income will no longer be taxed under the special defence contribution (SDC). - More Business Benefits
Losses can be carried forward longer, and incentives support R&D and new investments.
When It Starts
All changes take effect January 1, 2026. Now is a good time to plan your 2026 taxes.
Why This Matters
- Keep more of what you earn with a higher tax-free limit and extra deductions.
- Non-dom benefits continue for international income.
- Business taxes are simpler and lower overall.
- Cyprus remains a great base in the EU for remote work and entrepreneurship.
If you plan to live or run a business in Cyprus, review your tax plan now to make the most of these changes before 2026.