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Tax Reform: Zero Tax for Tens of Thousands by 2026

Published February 11, 2026, 14:01
Tax Reform: Zero Tax for Tens of Thousands by 2026

The Cypriot tax reform has come into effect and is already yielding results, with a reduction in the tax burden and an increase in disposable income for citizens and businesses. Approximately 200,000 taxpayers have already seen an increase in their net income, and it is estimated that 30,000 will be completely exempt from income tax by 2026. The increase in the tax-free allowance to €22,000 is a key element of the reform, while the new tax scales and targeted tax breaks reduce the tax burden on thousands of households. A family with four children and an income of €130,000 is expected to see an annual increase in their disposable income of around €7,000, while a single-parent family with three children and an income of €70,000 will see an increase of over €4,000. The changes affecting businesses, such as the abolition of deemed dividend distribution and the reduction of the Special Defence Contribution, are expected to benefit over 30,000 small businesses. In addition, new tax incentives promote innovation, green investments and modern forms of entrepreneurship. The reform, implemented after two decades, aims to create a fairer society and a more competitive economy.

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