Tax Compliance

The Cyprus tax compliance calendar

Cyprus tax runs on a calendar of returns and payments. Miss one and penalties and interest follow automatically. The core obligations for a typical company and its owners are:

Obligation	Who	Basis
Corporate income tax return (TD4)	Companies	Audited financial statements
Personal income tax return (TD1)	Individuals	Self-assessment of all income
Provisional (temporary) tax	Companies & self-employed	Estimated current-year income, two instalments
Special Defence Contribution (SDC)	Domiciled residents	Dividends and interest
Employer's return (TD7)	Employers	Payroll for the year

Corporate income tax at 15%

From 1 January 2026 the corporate income tax rate is 15% (up from 12.5%), aligning Cyprus with the OECD/EU global minimum tax. The return is prepared from audited financial statements, with the accounting profit adjusted to taxable profit — adding back disallowed expenses and applying reliefs such as the Notional Interest Deduction (NID) and tax-loss carry-forward. Many of Cyprus's headline advantages survived the reform intact: the participation exemption, the IP Box (effective rate as low as 3%), and no withholding tax on most outbound dividends, interest and royalties.

Provisional (temporary) tax and the 10% surcharge

Companies and self-employed individuals must estimate their current-year taxable income and pay it in two instalments during the year. If the final figure turns out to be higher and your estimate was below 75% of the actual taxable income, a 10% surcharge applies to the underpaid tax. Accurate forecasting therefore directly protects cash.

Personal income tax returns

Individuals file an annual self-assessment return reporting employment income, business profits, rents, dividends, interest and foreign income. The first €22,000 is tax-free, with progressive bands above that up to 35%. The 2026 reform added new household allowances — for a first-home loan or rent, green upgrades, insurance premiums and dependent children — that reduce taxable income subject to income thresholds. Filing a return is mandatory from age 25.

Taxable income band	Rate
€0 – €22,000	0%
€22,001 – €32,000	20%
€32,001 – €42,000	25%
€42,001 – €72,000	30%
Over €72,000	35%

Special Defence Contribution (SDC)

SDC applies only to Cyprus tax residents who are also domiciled in Cyprus. Following the 2026 reform, SDC on dividends is 5% (down from 17%), SDC on most passive interest is 17% (3% on certain EU/EEA government bonds and Health Fund instruments), and SDC on rents was abolished. Non-domiciled residents are exempt from SDC altogether — one of the cornerstones of the non-dom regime.

Penalties, interest and how to avoid them

Late filing, late payment and underestimation each carry their own penalty or surcharge, plus interest on overdue tax. The reliable way to avoid them is a managed calendar with reminders and forecasts — which is exactly what we provide, so nothing slips and your estimates stay above the 75% line.