Cyprus 8% Crypto Tax | Cryptocurrency Taxation
Cryptocurrency Taxation in Cyprus
Cyprus has enacted an 8% flat tax on cryptocurrency gains effective January 1, 2026. The legislation (Article 20E of the Income Tax Law) was approved by Parliament on December 22, 2025. This framework provides a clear and predictable taxation structure for both individuals and corporate entities holding digital assets.
The regime complements Cyprus's existing tax advantages, including Non-Dom status and flexible residency rules, while maintaining full compliance with EU regulations and MiCA requirements. Cyprus remains a well-regulated EU jurisdiction for digital asset holders seeking tax certainty.
Key Features of the Cyprus Crypto Tax Regime
8% Flat Rate
A uniform rate applies to all cryptocurrency gains regardless of amount, providing predictable tax planning.
Individuals & Companies
The rate applies equally to natural persons and legal entities, with no differentiation based on holding structure.
Non-Dom Dividend Exemption
Dividends received by Non-Dom residents remain exempt from Special Defence Contribution for up to 17 years.
60-Day Residency Rule
Tax residency can be established under the 60-day rule for individuals with Cyprus business ties.
EU Member State
Full regulatory framework under MiCA with access to EU markets through a single CASP license.
Securities Exemption
Gains from disposal of shares and securities remain exempt from capital gains tax under existing rules.
Clear Calculation Method
Taxable gain equals disposal proceeds minus acquisition cost and allowable expenses.
Path to Citizenship
Cyprus residency can lead to EU citizenship through naturalisation after the required residency period.
European Comparison
Cryptocurrency tax rates across EU member states:
| Country | Rate | Notes |
|---|---|---|
| Cyprus | 8% | Flat rate from 2026 |
| Portugal | 28% | 0% after 1 year |
| Italy | 26% | Flat rate |
| France | 30% | PFU flat rate |
| Spain | 19-28% | Progressive |
| Germany | 45% | 0% after 1 year |
| Austria | 27.5% | Flat rate |
| Netherlands | 36% | Box 3 deemed return |
Taxable Disposals
- Conversion to Fiat - Disposal of cryptocurrency for fiat currency (EUR, USD, etc.)
- Token Exchanges - Exchange of one cryptocurrency for another constitutes a disposal
- Payment for Goods/Services - Use of cryptocurrency as payment triggers a taxable event
- Transfers & Gifts - Gratuitous transfers of cryptocurrency
Excluded from 8% Rate
- Mining income - subject to general income tax provisions
- Staking rewards - taxed under income tax rules
- Unrealised gains - no tax until disposal
- Capital losses - may offset gains in the same tax year
Tax Residency Requirements
To benefit from Cyprus tax treatment, individuals must establish tax residency:
183-Day Rule
Physical presence exceeding 183 days in Cyprus during a calendar year establishes tax residency.
60-Day Rule
Available to individuals not exceeding 183 days in any other jurisdiction, with Cyprus business interests or employment.
Treatment of Losses
- Losses may offset cryptocurrency gains within the same tax year
- Loss carry-forward to subsequent years is not permitted
- Cryptocurrency losses cannot offset other categories of income
Implementation Process
Initial Assessment
Review of existing holdings, trading activity, and current tax position to determine optimal residency and structuring approach.
Structure Analysis
Evaluation of personal versus corporate holding structures, considering Non-Dom status and dividend treatment.
Residency Establishment
Coordination of tax residency requirements, company formation if applicable, and registration with Cyprus tax authorities.
Ongoing Compliance
Annual tax filings, record maintenance, and regulatory reporting including CARF requirements.
How We Can Help You
Portfolio Review
Analysis of your crypto holdings, acquisition history, and current tax exposure to plan the optimal timing and structure for Cyprus residency.
Pre-2026 Planning
Strategic planning before the 8% regime takes effect, including Non-Dom status considerations and existing gain treatment.
Residency Establishment
Guidance on meeting 60-day or 183-day residency requirements with minimal disruption to your current lifestyle.
Record Keeping
Setting up compliant record-keeping systems for cost basis tracking, transaction logs, and CARF reporting requirements.
Annual Tax Filing
Preparation and submission of personal tax returns declaring crypto disposals and calculating tax liability.
Crypto-Friendly Banking
Introduction to Cyprus banks accepting crypto-related funds and guidance on fiat on/off ramp considerations.
Frequently Asked Questions
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