Cyprus Crypto Tax 2026: Crypto Trading Taxation in Cyprus (Corporate vs Personal)
Cyprus has introduced a dedicated “Cyprus crypto tax” framework as part of the wider tax reform effective from 1 January 2026. This reform creates a clear statutory basis for taxing gains from the disposal of crypto-assets at a flat 8% rate, replacing much of the historic uncertainty around whether profits should be treated as trading income or non-taxable capital gains. As crypto adoption accelerates, understanding how Cyprus taxes crypto trading, swaps, and payments is essential for both companies and individuals operating from Cyprus.
In this article, we explain how the Cyprus crypto tax works from 2026 onwards, the key differences between corporate and personal treatment, what constitutes a taxable “disposal” (including crypto-to-crypto exchanges), how losses are treated, and how the wider reform impacts dividend planning and profit extraction.
Corporate Crypto Tax in Cyprus
For companies, crypto taxation from 2026 is split between (i) a special 8% regime for gains from the disposal of crypto-assets, and (ii) the ordinary corporate income tax regime for non-qualifying income. The correct classification of crypto-related receipts remains important, especially where activity involves mining, staking, DeFi yield, or service-type income.
- Cyprus crypto tax for companies: 8% on gains from crypto-asset disposals (from 1 January 2026)
From 1 January 2026, gains arising from the disposal of crypto-assets are subject to a flat 8% tax. The concept of “disposal” is broad and includes selling crypto for fiat, exchanging one crypto-asset for another, gifting or donating crypto-assets, and using crypto-assets as a means of payment (for example, paying invoices or buying goods or services with crypto).
- Corporate income tax rate (15%) applies to non-disposal business profits
The reform increased the general Cyprus corporate income tax rate to 15% from 1 January 2026. Crypto-related receipts that do not fall within the disposal regime may be taxed under the ordinary rules at 15%, depending on their nature and the company’s activity profile.
- Loss treatment: ring-fenced, same tax year only (no carry-forward)
Losses from crypto-asset disposals are ring-fenced. They may be offset only against gains from crypto-asset disposals realised in the same tax year by the same company. They cannot be carried forward to future years, cannot be surrendered under group relief, and cannot be used against other taxable income streams.
- Realised vs unrealised gains
Cyprus taxes realised gains arising on a disposal event. Mere price appreciation while the company continues to hold crypto-assets, without a disposal, does not create an immediate tax charge under the disposal regime. Robust record-keeping is nevertheless essential to support cost basis and valuations at disposal, particularly for swaps and crypto payments.
- Deemed Dividend Distribution abolished for post-2026 profits, dividends become the main profit extraction point
For profits earned from 1 January 2026 onwards, the deemed dividend distribution regime is abolished. This means shareholder-level taxation is driven primarily by actual dividends and value transfers, rather than statutory deemed distributions. Cyprus domiciled individuals remain within Special Defence Contribution on dividends (at the reduced post-reform rate for post-2026 profits), while Cyprus tax resident non-domiciled individuals remain outside Special Defence Contribution on dividends under the non-dom rules. Transitional rules may still apply for profits earned before 1 January 2026.
Personal Crypto Taxation in Cyprus
For individuals, the Cyprus crypto tax reform is a structural shift. From 2026, gains from the disposal of crypto-assets are taxed at a flat 8% rate, which significantly reduces the importance of debating “trading vs investment” for disposal gains. However, that distinction can still matter for crypto-related receipts that do not arise on disposal.
- Cyprus crypto tax for individuals: 8% flat tax on disposal profits
From 1 January 2026, profits from disposing of crypto-assets are subject to 8% tax. Taxable disposals include sales, crypto-to-crypto exchanges, gifts or donations, and the use of crypto-assets as payment. This is a key practical point because many investors realise gains through swaps or spending without converting to fiat.
- Loss treatment: ring-fenced to the same year
Losses from crypto disposals may be offset only against gains from crypto disposals realised in the same tax year by the same individual. They cannot be carried forward and cannot be set off against salary, rental income, interest, or other non-crypto income.
- Mining, staking, and yield require separate analysis
Not all crypto-related receipts are automatically covered by the 8% disposal regime. Crypto acquired through mining is carved out from the special disposal regime and may be taxed under the ordinary rules, depending on the facts. Other receipts such as staking rewards, lending interest, or DeFi yield may also require classification under the general income tax framework.
- Personal income tax rates still matter for non-disposal crypto income
Where a crypto-related receipt is taxed under the ordinary income tax rules (rather than the 8% disposal regime), the post-reform personal income tax bands apply from 2026. The tax-free threshold increases to €22,000, and progressive rates apply thereafter, up to 35% above €72,000.
- Tax advantages for non-domiciled persons
Individuals who are Cyprus tax residents and qualify as non-domiciled (non-dom) can enjoy significant tax benefits. Non-doms are exempt from Special Defence Contribution on dividends and interest, which can remain relevant where crypto activity is undertaken through a Cyprus company and profits are extracted via dividends (subject to the post-2026 dividend rules and any transitional provisions).
Optimising Cyprus Crypto Taxation
Although Cyprus now taxes gains from crypto-asset disposals, the flat 8% regime provides a comparatively clear and competitive framework. In practice, the optimal structure depends on the nature of the activity, the expected volatility and timing of gains and losses, the need for banking and governance, and how profits will be reinvested or extracted.
- Incorporation of a Cyprus company
Many individuals and groups prefer to conduct activity through a Cyprus company for governance, operational separation, and scalability. Where the activity falls within the disposal regime, the 8% framework applies to disposal gains, while other income may be taxed under ordinary corporate rules. If you are considering a corporate structure, see our guide on Cyprus company formation.
- Compliance and record-keeping
Because taxable disposals include swaps and payments, maintaining an audit trail is essential: exchange statements, wallet addresses, transaction hashes, valuation methodology at disposal, and supporting documentation for counterparties and purpose of transfers. This is particularly important where activity spans multiple exchanges and self-custody wallets.
- Obtaining a tax ruling
Where activity involves multiple streams (spot trading, OTC, treasury operations, token launches, DeFi yield, mining, or cross-border elements), a tax ruling can provide certainty on classification and treatment. A tax ruling may be requested from the Cyprus Income Tax Department.
FAQ: Cyprus Crypto Tax
How much is crypto tax in Cyprus from 2026?
From 1 January 2026, gains from the disposal of crypto-assets are taxed at a flat 8% rate for both individuals and companies, subject to the scope of the disposal regime and exclusions such as mining-acquired crypto.
Is crypto-to-crypto swapping taxable in Cyprus?
Yes. Exchanging one crypto-asset for another is treated as a disposal, meaning gains can arise even where no fiat currency is involved.
Can crypto losses be carried forward in Cyprus?
No. Losses from crypto disposals are ring-fenced and can only be offset against crypto disposal gains in the same tax year. They cannot be carried forward and cannot be set off against other income.
Does Cyprus still have tax-free capital gains on crypto?
From 1 January 2026, Cyprus introduced a specific statutory regime taxing gains from crypto-asset disposals at 8%, which replaces the historic reliance on arguing capital treatment for many scenarios.
Conclusion
The Cyprus tax reform effective from 1 January 2026 has created a clear “Cyprus crypto tax” framework by introducing an 8% flat tax on gains from the disposal of crypto-assets. The definition of disposal is broad and captures sales, exchanges, gifts, and crypto payments. Losses are ring-fenced to the same tax year and cannot be carried forward, making timing and record-keeping particularly important in volatile markets.
For companies, the 8% disposal regime operates alongside the general corporate tax framework (now 15%), and the abolition of deemed dividend distribution for post-2026 profits materially changes how retained earnings and dividend planning are approached. For individuals, the flat 8% regime reduces uncertainty for disposal gains, while ordinary income tax rules may still apply to other crypto-related receipts such as mining and certain yield streams. In all cases, careful structuring, documentation, and compliance are essential.
