Cyprus Times

Tax Reform Takes Effect: Lower Taxes, Higher Disposable Income

Published January 21, 2026, 15:15
Tax Reform Takes Effect: Lower Taxes, Higher Disposable Income

The new tax reform has come into effect, bringing immediate benefits to citizens, families, and businesses through tax reductions and increased disposable income. The system is characterized as fairer, more modern, and simpler, with an emphasis on strengthening the middle class and healthy entrepreneurship. Key elements of the reform include raising the tax-free threshold to €22,000, restructuring tax brackets with reduced rates, tax allowances for families based on the number of children, tax incentives for home energy upgrades, electric vehicle purchases, and housing, as well as reducing the tax on dividends and introducing a special rate for stock options and cryptocurrencies. The government aims to strengthen social cohesion and create stable foundations for sustainable development, and has provided a digital tool to calculate individual tax benefits.