Cyprus Crypto Tax — 8% Flat Rate on Crypto Gains from 2026
✦ New from 2026
Cyprus introduced a dedicated crypto tax provision effective 1 January 2026 under Article 20E of the Income Tax Law (ITL). The new rule establishes a special 8% flat tax rate on profits from the disposal of MiCA-defined crypto-assets, with ring-fenced losses and a specific exclusion for mining-acquired crypto. Profits from crypto transactions not falling within Article 20E are taxed under the general income tax provisions.
Article 20E applies to “profits of any person” arising from crypto disposals. In practice, this operates within Cyprus’s normal charging framework — meaning it applies to Cyprus tax residents on their worldwide crypto gains and to non-residents only on Cyprus-source crypto profits (if any). The regime applies equally to individuals and companies.
📋 Previous Provisions
Until 2025: No specific crypto tax rules existed in Cyprus. Crypto gains were generally treated either as tax-exempt capital gains or subject to general income tax at progressive rates (up to 35% for individuals, 12.5% for companies), depending on characterisation. Significant uncertainty existed regarding the correct treatment.
What Crypto Assets Are Covered by the 8% Tax (MiCA Definition)
Cyprus defines “crypto-assets” by reference to Article 3(1)(5) of EU Regulation 2023/1114 (Markets in Crypto-Assets Regulation — MiCA). This EU-aligned definition ensures regulatory consistency across the European Union and provides clarity for international operations.
What IS Covered
The 8% flat tax regime applies to:
- Bitcoin and Ethereum — the primary cryptocurrencies
- Stablecoins — crypto-assets designed to maintain stable value (e.g., USDC, USDT, EUR stablecoins)
- Utility Tokens — crypto-assets that provide access to digital services or functions within a blockchain ecosystem
- Other Crypto-Assets — any digital asset that meets the MiCA definition: a digital representation of value that can be transferred, stored, and traded electronically
What is NOT Covered
Important exclusions and boundary cases:
- NFTs — Non-fungible tokens that do not meet the MiCA definition (e.g., unique digital art, collectibles) are likely outside the 8% regime. However, the boundary is not always clear: series of NFTs, fractionalised NFTs, or NFTs with transferable economic rights may still fall within MiCA’s scope depending on their characteristics. Classification should be assessed on a case-by-case basis.
- Tokenized Securities — Digital representations of traditional financial instruments (stocks, bonds) are generally excluded from MiCA and therefore from the 8% regime. Their tax treatment follows the general ITL provisions, and companies may benefit from the securities exemption on qualifying “titles” — but whether a particular tokenized asset qualifies depends on its specific legal characteristics.
- Central Bank Digital Currencies (CBDCs) — Digital versions of government-issued fiat currencies are excluded from MiCA’s definition of crypto-assets and are therefore outside the 8% regime.
💡 Practical Guidance: If you hold digital assets whose classification is unclear (e.g., hybrid tokens with both security and utility features, or cross-chain wrapped tokens), obtain professional classification advice before tax year-end. Clear documentation of the asset’s economic characteristics and regulatory treatment is essential for compliance.
The 8% Flat Tax on Crypto Disposals — Rate, Calculation & Examples
Tax Rate
Gains arising from the disposal of crypto-assets are subject to a flat tax rate of 8%. This rate applies uniformly to individuals and companies and is independent of income level, holding period, or trading frequency.
| Taxpayer Type | Crypto Disposal Gains Rate | Comparison (General CIT/IT) |
|---|---|---|
| Individual | 8% | General IT: up to 35% (progressive) |
| Cyprus Company | 8% | General CIT: 15% (flat) |
What Constitutes a Disposal
Article 20E(3)(β) defines “disposal” to include four categories of transactions:
| Disposal Type | Description | Example |
|---|---|---|
| Sale | Selling crypto-assets for fiat currency (EUR, USD, etc.) or stablecoins | Selling 1 Bitcoin for €60,000 cash |
| Gift | Gifting or donating crypto-assets to another person, even without consideration | Transferring Ethereum to a family member or charity |
| Exchange (Swap) | Exchanging one crypto-asset for another crypto-asset | Trading Bitcoin for Ethereum on a DEX or CEX |
| Payment | Using crypto-assets as a means of payment for goods or services | Paying €10,000 worth of Bitcoin for a laptop purchase |
💡 Important Note on Transfers: Transferring crypto between your own wallets (e.g., from an exchange wallet to a cold storage wallet) is not a disposal and does not trigger tax. Only transfers that change beneficial ownership, economic exposure, or represent a value realisation are taxable events.
Gain Calculation and Cost Basis
The taxable gain is calculated as: Sale Proceeds − Cost Basis = Taxable Gain
For crypto acquired from 1 January 2026 onwards: Cost basis is the actual acquisition cost (purchase price plus transaction fees and costs of acquisition).
For crypto acquired before 1 January 2026:
⚠ Important — Transitional Position Uncertain: Article 20E does not contain an explicit transitional provision specifying the cost basis for crypto acquired before 1 January 2026. In the absence of specific guidance, the default position under general tax principles would be to use the historical acquisition cost. However, it is anticipated that the Cyprus Tax Department may issue administrative guidance clarifying whether taxpayers can elect to use the market value at 1 January 2026 as the cost basis — which would effectively exempt pre-2026 appreciation from the 8% tax. Until such guidance is published, taxpayers holding pre-2026 crypto should document both their historical acquisition cost and the market value of their holdings at 1 January 2026, so that they are prepared regardless of the approach ultimately adopted. Seek professional advice before filing.
Example: Gain Calculation (Post-2026 Acquisition)
- Purchased 1 BTC on 15 June 2026 for €50,000
- Sold 1 BTC on 30 November 2026 for €65,000
- Gain = €65,000 − €50,000 = €15,000
- Tax @ 8% = €1,200
Crypto Mining Income in Cyprus — Why It’s Taxed Differently
Mining income — the income derived from validating transactions or creating new cryptocurrencies — is explicitly excluded from the 8% flat tax regime under Article 20E(4). The law states that the 8% rate “does not apply in the case of disposal of crypto-assets which were acquired through mining activity.” Profits from mining-acquired crypto are therefore taxed under the general income tax provisions of the ITL.
⚠ Important Note: Article 20E only states that the 8% regime does not apply to mining-acquired crypto. It does not specify the detailed mechanics of how mining income is taxed (e.g., whether income is recognised on receipt of the reward, how cost basis is established for subsequent disposal, etc.). The treatment set out below reflects what we consider to be the most likely interpretation under general income tax principles, pending specific guidance from the Cyprus Tax Department.
What Constitutes Mining
Mining refers to the process of:
- Proof-of-Work (PoW) Mining: Using computing power to solve complex cryptographic puzzles and validate blockchain transactions, receiving newly created crypto as a reward
- Proof-of-Stake (PoS) Validation: Locking up crypto-assets to participate in transaction validation, receiving newly minted or inflation tokens as rewards (if the protocol creates new supply)
- Protocol-Level Rewards: Receiving newly created tokens directly from a blockchain protocol for operating nodes or providing infrastructure
⚠ Likely Treatment (Pending Guidance): Because the mining exclusion applies, profits from disposing of mining-acquired crypto would fall under the general income tax rules rather than the 8% regime. In our view, this likely means mining-derived crypto disposals are taxed at the individual’s progressive IT rate (up to 35%) or company CIT rate (15%). However, the precise mechanics — including whether mining income is recognised on receipt of the reward and how cost basis is determined for subsequent disposal — are not specified in Article 20E and remain subject to interpretation pending Tax Department guidance.
Likely Tax Treatment of Mining Income (Interpretation)
| Mining Activity | Tax Treatment on Receipt | Rate (Individual) | Rate (Company) |
|---|---|---|---|
| Mining reward (new crypto created) | Taxable income (general IT provisions) | Up to 35% | 15% |
| Transaction fees (paid in crypto) | Taxable income | Up to 35% | 15% |
| Disposal of mined crypto | Capital gain (general IT rules, not Article 20E) | Up to 35% | 15% |
Illustrative Example: Mining Tax Calculation (Based on Likely Interpretation)
- Individual miner receives 0.5 BTC as a mining reward in May 2026, valued at €25,000 at receipt
- This €25,000 is taxable income under general IT rules
- If the individual’s marginal IT rate is 30%, tax on receipt = €7,500
- Later, the same 0.5 BTC is sold for €28,000 in December 2026
- Capital gain on disposal = €28,000 − €25,000 (cost basis = FMV at receipt) = €3,000
- Since this is mined crypto, the gain is taxed under general rules (not 8%), at the individual’s marginal rate (30%) = €900
- Note: The fair market value at receipt is used as cost basis for the subsequent disposal to avoid double taxation.
💡 Mining Structuring: Because mining is excluded from the favourable 8% rate, individuals and companies engaged in significant mining should carefully plan whether mining is performed at the individual level (subject to progressive rates up to 35%) or within a Cyprus company structure (subject to 15% CIT). Companies also benefit from deductibility of operating expenses (electricity, hardware depreciation, labour costs), which can substantially reduce net taxable mining income.
Staking, Yield Farming & DeFi Income Tax Treatment in Cyprus
Staking rewards, yield farming returns, DeFi protocol income, and airdrops do not constitute “disposals” of crypto-assets and are therefore not subject to the 8% flat rate. Under Article 20E(5), profits from crypto transactions that do not fall within Article 20E are taxed under the general income tax provisions of the ITL (Parts III and V).
⚠ Important Note: Article 20E does not contain specific rules for staking, yield farming, airdrops, or DeFi income. The treatment set out below reflects what we consider to be the most likely interpretation under general income tax principles. The Cyprus Tax Department has not yet issued specific guidance on these categories of crypto income. Taxpayers with material exposure to these income streams should seek professional advice.
Distinction from Mining
Staking and yield farming differ conceptually from mining. While mining creates new supply on the blockchain and requires computational work, staking and yield farming involve:
- Locking capital: Depositing crypto into a protocol or validator to participate in consensus or liquidity provision
- Earning returns: Receiving newly minted tokens (in PoS systems) or trading fees/rewards from the protocol
- No new supply creation: The rewards are typically redistributed from protocol inflation or participant fees, not newly created economic value
For tax purposes, staking and yield farming would likely be treated as income-producing activities under general tax principles. The specific rates and timing of recognition remain subject to Tax Department guidance.
Likely Tax Treatment of Crypto Income Streams (Interpretation)
| Income Type | Taxable Event | Individual Rate | Company Rate |
|---|---|---|---|
| Staking rewards | On receipt of reward tokens | Up to 35% | 15% |
| Yield farming returns | On receipt or realisation of yield | Up to 35% | 15% |
| Liquidity pool fees | On receipt of fee tokens | Up to 35% | 15% |
| DeFi protocol income | On receipt of returns/distributions | Up to 35% | 15% |
| Airdrops (gratuitous) | On receipt of tokens (likely) | Up to 35% | 15% |
| Incentive/grant programs | On receipt of grant tokens | Up to 35% | 15% |
| Subsequent disposal of staked/farmed crypto | At sale/exchange (Article 20E) | 8% | 8% |
⚠ Likely Treatment (Pending Guidance): Under general tax principles, when you receive staking rewards or yield farming returns, the initial receipt would likely be treated as taxable income at normal rates. When you later dispose of those earned crypto-assets (by selling, gifting, or exchanging them), the gain on disposal would be subject to the 8% flat rate under Article 20E (since those crypto-assets were not acquired through mining). The cost basis for the disposal would be the fair market value at receipt. This two-step treatment is our interpretation and has not been confirmed by the Tax Department.
Illustrative Example: Staking Workflow (Based on Likely Interpretation)
- March 2026: Purchase 10 ETH for €30,000 (cost basis = €30,000)
- May 2026: Lock 10 ETH into a PoS validator (this is not a disposal — cost basis remains €30,000)
- December 2026: Receive 0.5 ETH staking reward, valued at €2,000 at receipt
- Tax at receipt: €2,000 is taxable income under general IT provisions at individual’s marginal rate (e.g., 30%) = €600
- January 2027: Unstake all ETH and sell 10.5 ETH for €38,000
- Cost basis on disposal: €30,000 (original 10 ETH purchase) + €2,000 (FMV of 0.5 ETH reward at receipt) = €32,000
- Gain on disposal: €38,000 − €32,000 = €6,000
- Tax on disposal at 8%: €480
- Total tax: €600 (income at receipt) + €480 (disposal gain) = €1,080
Airdrops: Special Consideration
Airdrops — the gratuitous distribution of tokens to holders — present a unique classification challenge:
- Gratuitous airdrops (no action required): Likely taxable as income on receipt under general IT rules, unless they qualify as gifts (which is unclear under Cyprus law for digital assets)
- Bounty/incentive programs (action required): Clearly taxable as income (employment-like income or trading income) on receipt
- Hard forks (existing holders receive new tokens): May be treated as a non-taxable return of capital (cost basis adjustment) rather than income, but this is uncertain
The treatment depends on the specific facts and circumstances. Conservative compliance suggests treating airdrops as taxable income at fair market value on receipt unless professional advice indicates otherwise.
💡 Planning Tip: If you receive significant airdrops or engage in yield farming, maintain detailed records of the date, quantity, and fair market value of each distribution. For yield farming, distinguish between (1) return of capital, (2) reinvested protocol fees, and (3) newly issued incentive tokens. Proper documentation will be essential if the Tax Department audits your crypto activity.
Crypto Loss Rules — Ring-Fencing and No Carry-Forward
The treatment of losses from crypto disposals is significantly harsher than the treatment of gains. Article 20E(2) establishes strict ring-fencing rules that limit loss offset and prevent carry-forward.
The Ring-Fencing Rule
⚠ Critical Loss Restriction: Losses arising from crypto disposals may ONLY be offset against gains from other crypto disposals in the SAME tax year. Unused losses cannot be carried forward to future years. Losses cannot be offset against other types of income (employment income, business income, rental income, etc.). Losses cannot be surrendered under group relief arrangements. This “ring-fence” creates a significantly harsher regime than applies to general business losses.
What CAN Be Done with Crypto Losses
- ✓ Offset against crypto gains in the same year: If you have a €20,000 loss on an Ethereum disposal and a €50,000 gain on a Bitcoin disposal in 2026, the net gain is €30,000, taxed at 8% = €2,400
- ✓ Harvest losses strategically within the calendar year: Plan year-end disposals to offset gains within the same tax year
What CANNOT Be Done with Crypto Losses
- ✗ Carry losses forward to 2027 or later years
- ✗ Offset losses against salary, wages, or employment income
- ✗ Offset losses against business or trading income
- ✗ Offset losses against rental income
- ✗ Offset losses against dividend income
- ✗ Surrender losses as group relief to a related company
- ✗ Use losses to create a net loss position that offsets other income
Examples: Loss Treatment Scenarios
Scenario 1: Crypto Gains Exceed Losses (Same Year)
- Bitcoin disposal gain: €50,000
- Ethereum disposal loss: €20,000
- Net crypto gain: €30,000
- Tax @ 8%: €2,400
Scenario 2: Crypto Losses Exceed Gains (Same Year)
- Bitcoin disposal gain: €20,000
- Ethereum disposal loss: €60,000
- Net crypto loss: €40,000
- Crypto tax for 2026: €0 (no net gain)
- The €40,000 loss cannot be used to offset any other income and cannot be carried to 2027
Scenario 3: Loss Carry-Forward (Not Permitted)
- 2026: Crypto loss of €30,000 (no gains to offset)
- 2027: Crypto gain of €50,000
- Taxable gain in 2027: €50,000 (the 2026 loss cannot be carried forward)
- Tax @ 8%: €4,000
⚠ Year-End Planning Note: Because losses cannot be carried forward, careful tax-year planning is essential. If you expect a net crypto loss in 2026, consider deferring profitable disposals to 2027 (if possible) to better match gains with losses in the optimal year. Conversely, if you have large losses, realise them before year-end to offset 2026 gains if available.
For the full loss rules including carry-forward periods for general business losses and CGT losses, see Individual Losses and Corporate Losses.
Individual vs. Company — Structuring Crypto Activity in Cyprus
Both individuals and Cyprus companies benefit from the 8% flat tax rate on crypto disposals. However, the overall tax and structuring considerations differ significantly depending on whether crypto operations occur at the individual or corporate level.
Crypto Disposal Gains: Individuals vs. Companies
| Factor | Individual | Cyprus Company |
|---|---|---|
| Crypto Disposal Tax (Article 20E) | 8% | 8% |
| Mining Income | Up to 35% (progressive) | 15% (flat) |
| Staking / Yield / DeFi Income | Up to 35% (progressive) | 15% (flat) |
| Operating Expense Deductibility | Limited (only if self-employed) | Full business expense deduction |
| Loss Ring-Fencing | Same-year offset only | Same-year offset only |
| Dividend Distribution | N/A | 5% withholding tax on dividends distributed to individual shareholders who are CY tax resident and domiciled (transitional rules may apply for profits earned before 2026) |
Other Income and Expense Deductions
| Consideration | Individual | Company |
|---|---|---|
| Business Expense Deductibility | Only if crypto activity is deemed self-employment/business (not passive investment) | All operating expenses deductible: hardware, software, electricity, labour, server costs, professional fees |
| Depreciation & Asset Write-Offs | Limited | Full depreciation schedule for equipment and software |
| Interest & Borrowing Costs | Generally not deductible | Deductible (subject to transfer pricing if related party) |
| Employee/Contractor Costs | N/A | Fully deductible |
| IP Box Regime Eligibility | Yes, if self-employed with qualifying IP (rare in practice) | Yes, if developing qualifying IP (e.g., blockchain protocols, proprietary algorithms) |
IP Box Regime: Crypto-Related IP
Cyprus companies (or self-employed persons) developing qualifying intellectual property — blockchain technology, protocols, proprietary algorithms, or smart contracts — may benefit from the IP Box regime, which provides an 80% exemption on qualifying IP income.
Example: Effective Tax Rate with IP Box
- Cyprus company earns €1,000,000 in qualifying IP income (e.g., licensing technology to users)
- IP Box exemption: 80%
- Taxable income: €1,000,000 × 20% = €200,000
- Tax @ 15%: €30,000
- Effective rate: 3% (€30,000 / €1,000,000)
See the Intellectual Property Box Regime page for detailed requirements and conditions.
Tokenized Securities — Not Subject to 8% Rate
Digital representations of traditional financial instruments (stocks, bonds) that are tokenized on a blockchain are generally considered to fall outside MiCA’s definition of crypto-assets, and therefore outside Article 20E. Their disposal would be governed by the general provisions of the ITL, and companies may benefit from the securities exemption under which gains from the disposal of qualifying “titles” (as defined in Article 2 of the ITL) are exempt from corporate tax entirely — but whether a particular tokenized asset qualifies depends on its specific legal characteristics.
Standard trading cryptocurrencies (Bitcoin, Ethereum, stablecoins, utility tokens, etc.) do not meet the definition of “titles” under the ITL and fall squarely within the Article 20E regime at 8%.
💡 Structuring Guidance: For businesses engaged in significant crypto trading, mining, or yield farming, a Cyprus company structure generally provides better tax efficiency than individual ownership due to (1) lower tax rates on mining/staking income (15% vs. 35%), (2) deductibility of operating expenses, (3) potential IP Box benefits, and (4) dividend repatriation planning. However, the company must have sufficient substance in Cyprus (employees, office, management & control) to satisfy substance requirements and avoid challenge as a shell entity.
Crypto Tax Compliance and Record-Keeping Requirements
The Cyprus Tax Department will require comprehensive documentation to substantiate crypto income and gains. Given the technical nature of crypto transactions and the complexity of the regime, maintaining organised records is critical for compliance and audit defence.
Required Documentation
1. Wallet and Exchange Mapping
- List all wallets and exchange accounts (with account numbers/identifiers)
- Document the beneficial owner of each wallet/account (individual or company)
- Record the date each account was opened
- Maintain identification of cold storage wallets, self-custodial addresses, and custodial accounts
2. Transaction Records
- For each disposal: date, asset, quantity, counterparty or exchange, transaction hash/ID, amount received (in EUR or fiat)
- For acquisitions: date, asset, quantity, cost paid (in EUR), method (purchase, gift, mining, airdrop, etc.)
- For transfers between accounts: date, quantity, sending and receiving addresses (to identify non-taxable transfers)
- Timestamps should be in a consistent timezone (UTC is standard)
3. Cost Basis Documentation
- For all pre-2026 acquisitions: both the historical acquisition cost and the market value at 1 January 2026 (retain both until the Tax Department issues transitional guidance)
- For post-2026 acquisitions: actual acquisition cost plus transaction fees
- For gifted or airdropped crypto: the fair market value at receipt (as new cost basis)
4. Fair Market Value Evidence
- For each transaction, document the fair market value used (in EUR or the exchange rate applied)
- Source of pricing data (exchange price, price aggregator, appraisal, etc.)
- For pre-2026 assets, source of 1 January 2026 market value assessment
5. Mining and Staking Documentation
- For mining: date, quantity, and fair market value of mining rewards; documentation of mining activity (pool memberships, hash rate data, etc.)
- For staking: dates crypto was locked, validator/pool details, amount of rewards received, fair market value at receipt
- Operating costs: electricity, hardware, software licenses (keep invoices)
6. Income Stream Separation
- Clearly distinguish: trading gains (Article 20E) vs. mining income vs. staking income vs. operating revenue vs. salary/wages
- Maintain separate ledgers or marked transaction records for each income category
- For companies: treasury activity (speculative trading) vs. operational activity
7. Loss Records
- Document all loss transactions with same detail as gains
- Track which losses offset which gains (within the same tax year)
- If losses exceed gains, calculate and document the unused loss (for audit evidence, although it cannot be carried forward)
Retention Period and Audit Support
Under Cyprus tax law, records must be retained for 6 years from the end of the tax year to which they relate. In practice, retaining records for 7 years is advisable to cover the full audit period.
If the Tax Department opens an audit, you must be prepared to produce:
- Exchange statements for all transactions
- Blockchain records (transaction hashes, wallet addresses)
- Bank statements showing fiat deposits/withdrawals related to crypto activity
- Valuation evidence for airdropped or gifted crypto
- Professional reports (if obtained) on the nature of crypto-assets or income classification
Tax Reporting and Filing
Individuals: Crypto income is reported on the annual tax return. Filing deadlines depend on whether you are subject to audit obligation and your income level. Different deadlines may apply — consult the Individual Income Tax page for current filing deadlines.
Companies: Crypto income is reported on the corporate tax return (Form C). Filing deadline: 31 January of the second year following the tax year (i.e., for 2026, file by 31 January 2028). Audited financial statements are required where turnover exceeds the applicable threshold.
💡 Best Practice: Maintain records in a spreadsheet or accounting software that clearly tracks (1) transaction date, (2) asset, (3) quantity, (4) proceeds/cost, (5) fair market value (EUR), (6) transaction category (disposal, mining, staking, etc.), and (7) applicable tax rate. This will substantially streamline tax return preparation and provide clear audit documentation.
Frequently Asked Questions — Crypto Tax in Cyprus
Is cryptocurrency taxed in Cyprus?
Yes. From 1 January 2026, gains from crypto disposals (sale, gift, swap, or payment) are taxed at a flat rate of 8% under Article 20E of the Income Tax Law. Mining and staking income are taxed under general income tax rules at standard rates (up to 35% for individuals, 15% for companies).
What is the Cyprus crypto tax rate?
8% flat rate on disposal gains. This applies to both individuals and companies, regardless of income level, holding period, or trading frequency.
Is swapping one crypto for another a taxable event?
Yes. Exchanging one crypto-asset for another is explicitly defined as a “disposal” under Article 20E and triggers the 8% tax on any gain. The gain is measured as the fair market value of the crypto received minus the cost basis of the crypto given up.
Can I carry forward crypto losses to future years?
No. Crypto disposal losses are strictly ring-fenced: they can only offset crypto disposal gains in the same tax year. Unused losses expire permanently at year-end and cannot be carried forward or offset against other income.
Is Bitcoin mining taxed at 8% in Cyprus?
No. The law explicitly states that the 8% regime does not apply where the crypto-assets were acquired through mining activity. Mining-acquired crypto falls under the general income tax provisions instead (up to 35% for individuals, 15% for companies). The precise mechanics of how mining income is taxed (e.g., recognition on receipt vs. on disposal) have not been specified by the Tax Department.
Are staking rewards taxed when received?
Under general income tax principles, staking rewards are likely taxable as income on receipt at general IT rates. When you later dispose of staking reward tokens, the subsequent disposal gain would be taxed at 8% under Article 20E (with cost basis equal to the fair market value at receipt). However, specific guidance from the Tax Department on the treatment of staking income has not yet been issued.
Is transferring crypto between my own wallets a taxable event?
No. Moving crypto between wallets you own (e.g., exchange to cold storage) does not constitute a disposal and does not trigger tax. Only transfers that change beneficial ownership or realise value are taxable.
Should I hold crypto personally or through a Cyprus company?
The 8% disposal rate is the same for both. However, companies benefit from lower rates on mining/staking income (15% vs. 35%), full expense deductibility, and potential IP Box benefits. The company must have genuine substance in Cyprus. When profits are distributed as dividends to individual shareholders who are Cyprus tax resident and domiciled, a 5% withholding tax applies (with transitional rules for profits earned before 2026).
Disclaimer
Please note that the information provided here is for general guidance only and does not constitute professional tax advice. Tax laws and interpretations are subject to change, and individual circumstances can significantly affect tax obligations and benefits. The crypto taxation regime is new as of 1 January 2026, and interpretations by the Cyprus Tax Department may evolve as administrative practice develops.
Contact Us
For personalized tax advice tailored to your specific situation, we strongly recommend consulting with a qualified tax professional. Our team is equipped with the expertise to navigate the intricacies of Cyprus tax law and provide you with customized solutions. Contact us to ensure that you are making the most informed decisions for your tax-related matters.
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