Cyprus Taxes: Income Tax, GESY & Deductions

Short answer: Cyprus personal income tax starts at 0% on annual taxable income up to EUR 22,000 in 2026, then 20-35% in brackets. GESY (healthcare) adds 2.65% on employment income. Qualifying non-doms are exempt from SDC on dividends and passive interest; deemed domicile applies after Cyprus tax residence in 17 of the 20 years preceding the current year.

Check income tax, contributions and exemption eligibility separately. This guide distinguishes tax year 2026 from the earlier rules.

Official sources:

• Tax Department — Individuals — Income Tax
• Tax Department — Tax Reform 2026 — latest guides and FAQs
• Ministry of Finance — Ministry of Finance
• UK–Cyprus Double Taxation Treaty — HMRC guidance

How does income tax work?

2026 Tax Rates

According to the Tax Department, the progressive tax scale is:

From 1 January 2026 (tax reform). Previous rates: 0% up to €19,500, 20% up to €28,000, 25% up to €36,300, 30% up to €60,000, 35% above.

Comparison with UK Tax Rates

The table compares headline bands, using the ordinary UK personal allowance and standard employee contribution category. It does not calculate an individual saving:

Key difference: The UK personal allowance falls by £1 for every £2 of adjusted net income above £100,000 and is zero at £125,140 or more. Cyprus instead applies the 0% band shown above. Compare tax using the same currency, year, deductions and social-contribution assumptions; the gross salary alone does not establish a fixed saving.

Check tax residence and domicile separately from your immigration status.

How It’s Calculated

1. Start with your gross salary
2. Subtract allowable deductions
3. The remaining amount is divided according to the tax brackets
4. Each portion is taxed at the corresponding rate

What is the 50% tax relief for new residents?

For qualifying employment commencing from 30 June 2023, the 50% exemption under Article 8(23A) concerns first employment in Cyprus, remuneration above €55,000 and the required 15 consecutive years of non-residence before the year employment begins. It can run for up to 17 tax years. Earlier employment cohorts have separate and transitional conditions in the completion guide. Previous residence as a visitor does not automatically establish eligibility. Confirm your employment dates and residence history before claiming it through TD59.

What other employment exemptions exist?

• 20% relief: Article 8(21A) provides an alternative first-employment exemption, capped at €8,550 annually, subject to its employment and prior overseas residence/work conditions.
• 25% returning-resident relief: Article 8(21B), the Minds in Cyprus scheme, covers qualifying employment or self-employment commencing in 2025–2030. The exemption is capped at €25,000 annually for seven consecutive tax years. It requires income above €30,000, non-residence during the previous seven years and Cyprus tax residence before that period. Applicants also need either a degree recognised by the Cyprus Council for the Recognition of Higher Education Qualifications and 36 months of full-time employment abroad with a foreign employer in the preceding 84 months, or 84 months of such employment before starting in Cyprus. Income must exceed €30,000 in the first twelve months and in each tax year claimed; Cyprus tax residence is required in subsequent claim years. It is not a general benefit for first-time arrivals.

Check the Tax Department’s 2025 return guide, employment exemptions section for the full conditions and interactions between exemptions.

How does GESY healthcare work?

What Is It

GESY is the General Healthcare System, funded through statutory contributions and state funding.

Contribution Rates

Who Can Use GESY

Contributions and access to services have separate legal tests. Cyprus citizens must satisfy the residence condition. EU citizens ordinarily resident in the government-controlled areas qualify through employment or permanent residence. Non-EU citizens ordinarily resident there need permanent residence or the statutory right to equal treatment in social insurance. Refugees, subsidiary-protection holders and eligible family members have separate categories. A work permit or payment of contributions alone does not establish entitlement; confirm your category with HIO.

HIO: beneficiary categories

Service charges

• Specialists: ordinarily €6 with a referral or €25 for direct access; exceptions apply, including direct gynaecology/obstetrics access for female beneficiaries aged 15+ at €6.
• Medicines: €1 per product per prescription; an additional price difference may apply for a more expensive medicine.
• Check the HIO service catalogue and your referral for the treatment you need.

How does social insurance work?

Ordinary contribution rates

The rates apply to insurable earnings under the Social Insurance rules.

What’s Included

• Pension contributions
• Unemployment benefits
• Maternity benefits
• Other social payments

What tax deductions are available?

These deductions reduce taxable income, rather than refunding the stated amount. They apply from tax year 2026. For example, a €2,000 deduction saves €600 when the whole amount falls in the 30% band.

The Tax Department guide assesses child eligibility at year-end and lists under-18 children, secondary-school pupils under 20, National Guard soldiers under 21, students under 24, and children permanently unable to support themselves regardless of age. Article 14B(3)(d) of the Income Tax Law uses “up to 24” for students. If your child is 24, ask the Department to resolve this difference before claiming. A stepparent cannot claim solely through marriage.

The child, housing and energy deductions are separate from the combined one-fifth limit for qualifying insurance and social/pension contributions. They do not reduce the income base used for that limit. Keep expenditure records and confirm insurance surrender consequences before withdrawing from a life policy.

Sources: Tax Department reform guide, 11 May 2026, official reform FAQs, 11 May 2026.

Other Deductions

• Union contributions
• Qualifying innovative-company share investment, subject to the applicable eligibility and limit rules
• Approved charitable donations, with supporting records

How do I fill out Form TD59?

What Is It

TD59 — a tax deduction declaration form submitted to your employer.

Why It’s Needed

• It informs the employer about other income and applicable deductions/exemptions
• The employer uses it to calculate monthly PAYE withholding more accurately
• It does not replace the annual TD1 return or guarantee a refund

Online Salary Calculator

Use our salary calculator for a basic estimate. You can also compare the independent Abasis Cyprus Tax Calculator. Include bonuses, a 13th salary and the actual employment period when estimating annual earnings. Check eligibility and inputs against the official Tax Department calculator; a calculator result does not establish entitlement or replace a tax return.

How does family income work?

For the child, housing and energy deductions, gross family-income ceilings are €100,000 for 0–2 children, €150,000 for 3–4 and €200,000 for 5 or more. A person qualifying in the guide’s single-person category, without a spouse, civil partner or dependent children, has a €40,000 ceiling. Qualifying single-parent families use the family thresholds. The number of children for the income ceiling differs from the number eligible for a child deduction: older children can count where at least one dependent child remains at year-end. Check the household and custody rules in the guide.

Include domestic and foreign earnings, pensions, rent, interest and dividends. The guidance excludes specified student-child income and benefits. Marriage, civil partnership, cohabitation with shared children and custody arrangements affect the classification; sharing an address alone does not settle it. Spouses or qualifying partners must consent to the required tax-information disclosure and meet filing conditions. See the official reform FAQs for your household category.

How do I get a tax residency certificate?

Why You Need It

A tax residency certificate confirms:

• You are a tax resident of Cyprus
• For applying double taxation agreements (DTAs)

UK–Cyprus Double Taxation Treaty

The UK–Cyprus DTA allocates taxing rights and provides double-taxation relief, subject to its conditions. For a Cyprus treaty resident:

• UK pension income — Article 17 generally assigns taxation to Cyprus for a Cyprus treaty resident. Government-service pensions have separate Article 18 rules: normally the paying state taxes them, with an exception for a recipient resident in and a national of the other state. Cyprus domestic rates and any foreign-pension election must then be checked separately.
• UK rental income — the UK may tax income from property there under Article 6. Article 22 provides a Cyprus credit for qualifying UK tax, capped at the Cyprus tax attributable to that income
• UK property gains — Article 13 permits UK taxation; check domestic capital-gains and business-income rules separately
• Dividends from UK companies — subject to Cyprus rules (potentially exempt under Non-Dom status)

HMRC departure: Follow HMRC’s departure guidance. People who do not usually file Self Assessment normally use P85; Self Assessment filers report residence through SA109. Working full-time abroad for a UK employer for at least a full tax year can require both.

How to Get It

The Tax Department’s certificate procedure directs individuals to complete TD126 and send it with the applicable supporting documents to the district office by email or post. The Department may request clarification and contacts the applicant for collection. Its foreign-national checklist includes residence documentation, passport/ID, title deed or tenancy agreement, a recent utility bill, employment contract and Social Insurance statement; additional items depend on the circumstances. Check the current checklist for your category before applying.

If You Have Foreign Income

If you have income from abroad (e.g., from renting an apartment):

• Do you need to declare it? Yes, if you’ve become a tax resident of Cyprus
• Is apostille required on documents? Depends on the situation
• From tax year 2026, €22,000 is a tax-free threshold, not a filing exemption. See the filing rules, including the resident age requirement.

What practical tips should I know?

1. Give TD59 to your employer with accurate income and eligible deduction information
2. Pay qualifying rent electronically — bank transfer, card or another recognised electronic payment method
3. Keep track of expenses — for possible deductions
4. Check your calculations — use the calculator
5. Consult professionals — for complex situations (income from multiple countries)

What tax portals should I use?

Cyprus has several tax portals:

• TAXISnet — individual income-tax returns for tax years 2017–2025
• Tax For All — individual returns from tax year 2026; also the relevant registration and personal-update procedures
• TaxPortal — amounts due, payments and payment history

Use the portal and instructions for the tax year and procedure you need.

Read more:

• Non-Dom status and the 60-day rule
• Social Insurance: pensions and benefits
• How to file a tax return
• Starting a company in Cyprus
• Self-employed in Cyprus

The Cyprus tax system is relatively simple but has nuances. The key is to properly set up deductions from the start of employment and not forget about annual declarations for foreign income.

Sources

• Tax Department — Individuals — gov.cy

• Tax Department — gov.cy

• HIO: specialist access and charges

• HIO: medicines and co-payments

• Tax residence and domicile — Tax Department

• TD59 employee declaration — Tax Department

• Social Insurance contributions — government business portal

• UK income-tax bands and employee National Insurance — HMRC, 2026/27

• Income Tax Law, Article 14B — personal deductions; read statutory wording alongside Department guidance