Newsroom
Cyprus’ long-awaited tax reform has officially taken effect, and families, workers, and businesses are already feeling the impact. The new system, designed to be fairer, simpler, and more modern, has reduced the tax burden for thousands of households while boosting disposable income.
At the heart of the reform is a higher tax-free income threshold of €22,000 for everyone, alongside a progressive rate system that eases the load on the middle class: 20% for income €22,001–32,000, 25% for €32,001–42,000, 30% for €42,001–72,000, and 35% for incomes above €72,000.
The changes are designed with ordinary citizens in mind; families, single parents, and even single workers can now see tangible relief. For example:
Two-parent household with two children, a mortgage, and solar panels: Total tax drops from €4,400 to €1,000, freeing up €3,400 in extra household income.
Single parent with two kids, rent, and an electric vehicle: Taxes fall from €3,450 to €1,100, putting an extra €2,350 into the family budget.
Single individual renting and driving electric: Cuts €1,100 in taxes, leaving more cash for daily expenses.
Large family with five children and energy upgrades: enjoys nearly €6,000 in tax savings, highlighting how the reform favors households juggling multiple responsibilities.
Beyond households, the reform also supports businesses by creating a simpler, more transparent system that encourages healthy entrepreneurship while strengthening the middle class. Officials say these policies aim to boost social cohesion and lay the groundwork for sustainable, competitive economic growth.
A new digital calculator allows citizens to check their personal benefits instantly: https://www.gov.cy/taxreform/
“With these changes, Cyprus is starting to reap the rewards of a tax system updated for the 21st century,” the Finance Ministry said in a statement. “Responsible policies are now making a direct difference in people’s lives.”
