Tax reform in Cyprus in 2026: who will benefit and who will face greater difficulties

In 2026, a large-scale tax reform comes into force in Cyprus, affecting employees, the self-employed, businesses, and investors alike. The authorities state that the goal of the changes is to make the system fairer and more modern; however, in practice, the reform will bring not only benefits but also new challenges.

What will change:

The main innovations concern income tax, social contributions, and business taxation. For some taxpayers, a reduction in the tax burden is предусмотрено — primarily for families with middle incomes and those who officially declare all sources of income.

At the same time, income control is being tightened, stricter reporting requirements are being introduced, and the rules for the self-employed and companies are being clarified. This means that tax evasion will become more difficult, and errors in declarations may prove more costly.

Who will benefit:

According to experts, the reform may be beneficial for:

• employees with stable incomes;
• families with children;
• businesses that operate transparently and use lawful tax incentives.

Those who will face the greatest difficulties:

• the self-employed and freelancers;
• small business owners without an accountant;
• those who receive income from different countries.

They will need more careful planning and possibly professional assistance to avoid fines and misunderstandings.

The authorities emphasize that the reform will be implemented in stages; however, experts advise starting preparations now and closely following clarifications from the tax authorities.