Figures checked September 2026
The headline rate
Cyprus-resident companies pay tax on worldwide taxable profits at 15 percent from 1 January 2026, up from the 12.5 percent rate Cyprus was known for, as part of aligning with the OECD's global minimum tax. It is still one of the lower corporate rates in the EU, just no longer the lowest by as wide a margin.
The IP box
Cyprus's IP box regime gives an 80 percent deduction on qualifying profit from patents, copyrighted software and similar IP assets, which can bring the effective tax rate on that income down to around 3 percent. The regime survived the 2026 reform largely intact; the effective rate only moved because the headline rate did. This is the single most consequential thing on this page for a software or IP-heavy business deciding where to hold its IP.
The notional interest deduction
A Cyprus company can claim a deemed interest deduction on new equity introduced into the business. The rate is calculated off a reference bond yield plus a fixed premium, around 8 percent for 2026. The deduction is capped at 80 percent of the taxable profit generated by the assets that equity funded. In practice, this rewards funding a Cyprus company with equity rather than debt, and it can be used alongside the IP box.
You, personally
None of the above touches how you're taxed as an individual. Cyprus has a non-domicile regime that can exempt qualifying tax residents from tax on dividends and interest, which is often the more consequential decision for a founder taking money out of their own company. That's a separate conversation with your accountant from the company's own tax position.
Figures current as of the 2026 reform (15 percent headline rate, IP box effective rate around 3 percent, notional interest deduction around 8.049 percent). Sources: