{"id":44574,"date":"2026-01-22T18:44:32","date_gmt":"2026-01-22T16:44:32","guid":{"rendered":"https:\/\/aclaauditors.com\/?p=44574"},"modified":"2026-01-22T18:49:18","modified_gmt":"2026-01-22T16:49:18","slug":"cyprus-tax-reform-2026-income-tax-summary","status":"publish","type":"post","link":"https:\/\/aclaauditors.com\/el\/cyprus-tax-reform-2026-income-tax-summary\/","title":{"rendered":"Cyprus tax reform 2026 \u2013 Income tax summary"},"content":{"rendered":"<div data-elementor-type=\"wp-post\" data-elementor-id=\"44574\" class=\"elementor elementor-44574\">\n\t\t\t\t<div class=\"elementor-element elementor-element-2d468ef4 e-flex e-con-boxed e-con e-parent\" data-id=\"2d468ef4\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-54813726 elementor-widget elementor-widget-text-editor\" data-id=\"54813726\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<h4><strong>A) New tax-free &amp; tax bands (from 2026)<\/strong><\/h4>\n<p>From <strong>1 January 2026<\/strong> , the Cyprus tax reform comes into force, which brings immediate changes for taxpayers. These changes will be reflected in the January 2026 payroll.<\/p>\n<p><strong>Tax bands 2026<\/strong><\/p>\n<table>\n<thead>\n<tr>\n<td>\n<p><strong>Taxable Income (\u20ac)<\/strong><\/p>\n<\/td>\n<td>\n<p><strong>Tax rate (%)<\/strong><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>0 \u2013 22,000<\/p>\n<\/td>\n<td>\n<p>0<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>22,001 \u2013 32,000<\/p>\n<\/td>\n<td>\n<p>20<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>32,001 \u2013 42,000<\/p>\n<\/td>\n<td>\n<p>25<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>42,001 \u2013 72,000<\/p>\n<\/td>\n<td>\n<p>30<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>72,001 and above<\/p>\n<\/td>\n<td>\n<p>35<\/p>\n<\/td>\n<\/tr>\n<\/thead>\n<\/table>\n<h4><strong>B) Claiming new tax allowances<\/strong><\/h4>\n<p>In addition to the above, the reform introduces new tax allowances for:<\/p>\n<ul>\n<li><strong>dependent children<\/strong><\/li>\n<li><strong>rent or interest on a primary residence mortgage<\/strong><\/li>\n<li><strong>Energy upgrade of main residence + purchase of an electric vehicle<\/strong><\/li>\n<\/ul>\n<p><strong>\u00a0<\/strong><strong>Certain conditions apply for eligibility of the new aforesaid discounts:<\/strong><\/p>\n<ol>\n<li><strong>Income criteria<\/strong>\n<ul>\n<li><strong>For families (gross family income)<\/strong>\n<ul>\n<li>up to \u20ac100,000 (1\u20132 children).<\/li>\n<li>up to \u20ac150,000 (3\u20134 children).<\/li>\n<li>up to \u20ac200,000 (5+ children).<\/li>\n<\/ul>\n<\/li>\n<li><strong>For single person<\/strong>\n<ul>\n<li>Gross income up to \u20ac40,000.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ol>\n<ol start=\"2\">\n<li><strong>Consent<\/strong> is required from both spouses\/guardians for the disclosure of tax information between them (in a special field in the tax return).<\/li>\n<li>Tax returns must be submitted <strong>within the deadlines <\/strong>from family members.<\/li>\n<\/ol>\n<p><em>The calculation of family income includes many types of income (employment, pensions, rents, interest\/dividends, etc.), with specific exceptions (e.g. income of full-time children from work, child benefit, etc.).<\/em><\/p>\n<ol>\n<li><strong>Discount for <u>dependent children<\/u> &#8211; discount amount per parent<\/strong><\/li>\n<\/ol>\n<ul>\n<li>\u20ac1,000 for 1st dependent<\/li>\n<li>\u20ac1.250 for 2nd<\/li>\n<li>\u20ac1,500 for 3rd and each additional<\/li>\n<\/ul>\n<p><strong><em>What is considered a dependent child (according to 31\/12)<\/em><\/strong><\/p>\n<ul>\n<li><em>&lt;18 or<\/em><\/li>\n<li><em>middle school student &lt;20 or<\/em><\/li>\n<li><em>soldier &lt;21 or<\/em><\/li>\n<li><em>student &lt;24 or<\/em><\/li>\n<li><em>a child with permanent disability (regardless of age)<\/em><\/li>\n<\/ul>\n<p><strong><em>Single-parent family<\/em><\/strong><\/p>\n<ul>\n<li><em>own income criteria.<\/em><\/li>\n<li><em>The discount per child is doubled.<\/em><\/li>\n<\/ul>\n<p><strong><em>Joint parental responsibility (child does not live together)<\/em><\/strong><\/p>\n<p><em>The parent is entitled to an allowance, based on income depending on whether he is considered a single person or a family.<\/em><\/p>\n<ol start=\"2\">\n<li><strong>Allowance for <u>rent or mortgage interest<\/u> (main residence)<\/strong><\/li>\n<\/ol>\n<p>A discount <strong>of up to \u20ac2,000<\/strong> is granted to each spouse\/partner or single person for:<\/p>\n<ul>\n<li>interest on a performing mortgage loan for a primary residence (Cyprus).<\/li>\n<li>or rent of a main residence (Cyprus) Conditions:\n<ul>\n<li>The rent must be paid electronically (remittance\/card\/e-mail).<\/li>\n<li>government subsidies reduce the expenditure for which a discount is given.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ol start=\"3\">\n<li><strong>Discount on <u>energy upgrade &amp; electric vehicle<\/u> <\/strong><\/li>\n<\/ol>\n<p>Discount <strong>of up to \u20ac1,000<\/strong> per spouse\/partner or single person, for:<\/p>\n<ul>\n<li>Energy upgrade of the main residence.<\/li>\n<li>RES systems \/ storage batteries.<\/li>\n<li>electric vehicles (TOM registration).<\/li>\n<\/ul>\n<p>&#8211; If the capital expenditure is higher than the allowable amount:<\/p>\n<ul>\n<li>The balance can be transferred and a discount of up to \u20ac1,000\/year for the <strong>next 4 years<\/strong> can be given, provided that the income criteria are met in these years.<\/li>\n<li>If the income criteria are not met in the year of expenditure, then the discount <strong>cannot be carried over<\/strong> to subsequent years.<\/li>\n<\/ul>\n<ol start=\"4\">\n<li><strong>Home insurance discount against natural disasters <\/strong><\/li>\n<\/ol>\n<ul>\n<li>For any residence (main\/holiday\/rented).<\/li>\n<li>Premium paid from <strong>01\/01\/2026.<\/strong><\/li>\n<li>Discount up to a total of \u20ac500.<\/li>\n<\/ul>\n<p><em>It is given <strong>without income criteria<\/strong>.<\/em><\/p>\n<ol start=\"5\">\n<li><strong>Life &amp; disability insurance premiums and redemption taxation<\/strong><\/li>\n<\/ol>\n<p>The guide (<a href=\"https:\/\/www.gov.cy\/media\/sites\/29\/2026\/01\/%CE%95%CF%80%CE%B5%CE%BE%CE%B7%CE%B3%CE%B7%CE%BC%CE%B1%CF%84%CE%B9%CE%BA%CF%8C%CF%82-o%CE%B4%CE%B7%CE%B3%CF%8C%CF%82-%CE%B5%CF%86%CE%B1%CF%81%CE%BC%CE%BF%CE%B3%CE%AE%CF%82-%CF%84%CE%B7%CF%82-%CF%86%CE%BF%CF%81%CE%BF%CE%BB%CE%BF%CE%B3%CE%B9%CE%BA%CE%AE%CF%82-%CE%BC%CE%B5%CF%84%CE%B1%CF%81%CF%81%CF%8D%CE%B8%CE%BC%CE%B9%CF%83%CE%B7%CF%82-%CE%B3%CE%B9%CE%B1-%CF%86%CF%85%CF%83%CE%B9%CE%BA%CE%AC-%CF%80%CF%81%CF%8C%CF%83%CF%89%CF%80%CE%B1-%CF%80%CE%BF%CF%85-%CE%B5%CE%AF%CE%BD%CE%B1%CE%B9-%CF%86%CE%BF%CF%81%CE%BF%CE%BB%CE%BF%CE%B3%CE%B9%CE%BA%CE%BF%CE%AF-%CE%BA%CE%AC%CF%84%CE%BF%CE%B9%CE%BA%CE%BF%CE%B9-%CE%9A%CF%8D%CF%80%CF%81%CE%BF%CF%85_0901.pdf\">Explanatory Guide<\/a>) explains:<\/p>\n<ul>\n<li>when life\/disability insurance premiums are deductible (and a 7% limitation on coverage).<\/li>\n<li>How is the <strong>partial redemption<\/strong> of an insurance policy taxed (differently before\/after 4 years).<\/li>\n<\/ul>\n<h4><strong>C) How discounts are declared<\/strong><\/h4>\n<p>The final discount amount per category is declared through <strong>TD 59 declaration<\/strong>, without analysing income criteria\/details.<\/p>\n<p>\u00a0<\/p>\n<p><strong>In order to fully benefit from additional personal allowances, deductions, exemptions or tax reliefs provided by law, <\/strong>carefully study the Explanatory Guide (<a href=\"https:\/\/www.gov.cy\/media\/sites\/29\/2026\/01\/%CE%95%CF%80%CE%B5%CE%BE%CE%B7%CE%B3%CE%B7%CE%BC%CE%B1%CF%84%CE%B9%CE%BA%CF%8C%CF%82-o%CE%B4%CE%B7%CE%B3%CF%8C%CF%82-%CE%B5%CF%86%CE%B1%CF%81%CE%BC%CE%BF%CE%B3%CE%AE%CF%82-%CF%84%CE%B7%CF%82-%CF%86%CE%BF%CF%81%CE%BF%CE%BB%CE%BF%CE%B3%CE%B9%CE%BA%CE%AE%CF%82-%CE%BC%CE%B5%CF%84%CE%B1%CF%81%CF%81%CF%8D%CE%B8%CE%BC%CE%B9%CF%83%CE%B7%CF%82-%CE%B3%CE%B9%CE%B1-%CF%86%CF%85%CF%83%CE%B9%CE%BA%CE%AC-%CF%80%CF%81%CF%8C%CF%83%CF%89%CF%80%CE%B1-%CF%80%CE%BF%CF%85-%CE%B5%CE%AF%CE%BD%CE%B1%CE%B9-%CF%86%CE%BF%CF%81%CE%BF%CE%BB%CE%BF%CE%B3%CE%B9%CE%BA%CE%BF%CE%AF-%CE%BA%CE%AC%CF%84%CE%BF%CE%B9%CE%BA%CE%BF%CE%B9-%CE%9A%CF%8D%CF%80%CF%81%CE%BF%CF%85_0901.pdf\">Explanatory Guide) <\/a>of Taxation, the frequently asked questions (<a href=\"https:\/\/www.gov.cy\/media\/sites\/29\/2026\/01\/FAQs_last.pdf\">FAQs<\/a>) and examples issued by the Department of Taxation.<\/p>\n<p>At <strong>ACLA AUDITORS<\/strong>, we can provide you with any additional information regarding the tax reform 2026.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>","protected":false},"excerpt":{"rendered":"<p>A) New tax-free &amp; tax bands (from 2026) From 1 January 2026 , the Cyprus tax reform comes into force, which brings immediate changes for taxpayers. These changes will be reflected in the January 2026 payroll. Tax bands 2026 Taxable Income (\u20ac) Tax rate (%) 0 \u2013 22,000 0 22,001 \u2013 32,000 20 32,001 \u2013&#8230;<\/p>","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16,18],"tags":[140,137,80,138,121,136,78,139],"class_list":["post-44574","post","type-post","status-publish","format-standard","hentry","category-articles","category-tax-alerts","tag-e22000","tag-137","tag-cyprus","tag-income-tax","tag-individuals","tag-reform","tag-tax","tag-taxation"],"_links":{"self":[{"href":"https:\/\/aclaauditors.com\/el\/wp-json\/wp\/v2\/posts\/44574","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/aclaauditors.com\/el\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/aclaauditors.com\/el\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/aclaauditors.com\/el\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/aclaauditors.com\/el\/wp-json\/wp\/v2\/comments?post=44574"}],"version-history":[{"count":5,"href":"https:\/\/aclaauditors.com\/el\/wp-json\/wp\/v2\/posts\/44574\/revisions"}],"predecessor-version":[{"id":44579,"href":"https:\/\/aclaauditors.com\/el\/wp-json\/wp\/v2\/posts\/44574\/revisions\/44579"}],"wp:attachment":[{"href":"https:\/\/aclaauditors.com\/el\/wp-json\/wp\/v2\/media?parent=44574"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/aclaauditors.com\/el\/wp-json\/wp\/v2\/categories?post=44574"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/aclaauditors.com\/el\/wp-json\/wp\/v2\/tags?post=44574"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}