C. Savva & Associates Guides Clients Through Cyprus Tax Reform

Nicosia, CY, Oct. 08, 2026 /CourierPR/ -- C. Savva & Associates, a Nicosia-based corporate services and tax advisory firm founded in 2009, is helping clients navigate the recent overhaul of the Cyprus tax system, which took effect on January 1, 2026. The reform, approved by the House of Representatives on December 22, 2025, and published in the Official Gazette on December 31, 2025, has significantly altered the tax landscape in Cyprus.

The corporate income tax rate has been increased from 12.5% to 15%, aligning Cyprus with the global minimum tax developed under the OECD's Pillar Two rules. This change has affected various aspects of the tax regime. The Special Defence Contribution charged on actual dividends paid to Cyprus tax-resident and domiciled individuals has been reduced from 17% to 5%. Additionally, the deemed dividend distribution regime, which required companies to treat a portion of undistributed profits as paid out, has been abolished for profits earned from 2026 onward.

Other notable changes include the repeal of stamp duty in full, allowing tax losses to be carried forward for seven years. Every company incorporated in Cyprus is now treated as tax resident on the island unless a double tax treaty provides otherwise. For individuals, the tax-free income threshold has risen to €22,000, and non-domiciled residents may extend their exemption from the Special Defence Contribution through a lump sum payment. New provisions also apply additional withholding taxes to dividends paid to entities in blacklisted and low-tax jurisdictions, and treat the private use of company assets, or transfers to shareholders below market value, as disguised dividends.

C. Savva & Associates is closely monitoring these changes and providing tailored advice to its clients.

The firm's work under the revised system centers on calculating each client's effective tax burden, reviewing provisional tax payments to ensure they reflect the updated rates, and identifying reliefs that may have been overlooked during the transition. These reviews are carried out by the firm's tax and accounting team, which includes UK Chartered Accountants, and they draw on the firm's accounting and financial management function to ensure bookkeeping, filings, and dividend planning remain consistent with the amended legislation.

The reform also impacts the firm's company formation and administration work. Because incorporation in Cyprus now establishes tax residence by default, new companies and businesses relocating to the island need to be set up with their treaty position and economic substance in mind from the outset. The firm's fiduciary, administration, and substance services address the local directorship, management, and governance arrangements that support this position. Clients establishing holding structures, international trusts, or alternative investment funds are assessed against the same revised rules before any structure is put in place.

Private clients are also a key focus for the firm. Founders and executives relocating to Cyprus through available residency routes are advised on how the updated personal tax bands, the higher tax-free threshold, and the revised non-dom provisions apply to their circumstances. The firm also provides tax guidance to individuals holding crypto assets, whose gains are now taxed at a flat rate of 8%. As banks and service providers continue to apply stricter onboarding standards, the firm prepares anti-money laundering and know-your-customer files, including source of funds documentation, to support account openings and corporate transactions.

Legal advice connected with the reform is provided through the firm's partner law firm, Nicholas Ktenas & Co., LLC, since C. Savva & Associates does not itself operate as a law firm. The arrangement allows clients to deal with the tax, accounting, and legal aspects of a restructuring in a coordinated manner, with each discipline handled by the appropriate professionals.