Cyprus

Cyprus introduced a significant change to its crypto tax framework with a proposed 8% flat capital gains tax on crypto disposal gains, effective from January 2026, pending final parliamentary ratification at the time of writing. Prior to this, Cyprus had no capital gains tax on cryptocurrency for most residents — a position that had made the island attractive to crypto professionals and investors relocating within the EU. The new regime represents a material shift and its precise scope — particularly the treatment of non-domicile residents and the interaction with the existing non-dom exemption — was still being clarified as the legislation moved through parliament. CySEC licenses Crypto Asset Service Providers (CASPs) under MiCA, and DAC8 exchange reporting has been active from 2026.

The position described here reflects the proposed regime as announced. Individuals with significant Cyprus tax positions should verify the current legislative status before relying on any specific rate or exemption.

Core Tax Treatment

Under the proposed framework in force from January 2026, gains from the disposal of cryptocurrency are subject to a flat 8% capital gains tax for Cypriot tax residents. This applies to sales, swaps, and other disposals — crypto-to-crypto exchanges are taxable events. There is no holding period exemption and no annual tax-free threshold under the proposed rules. The 8% rate applies to the net gain (proceeds minus acquisition cost), assessed in euros at the time of disposal.

Prior to January 2026, Cyprus had no CGT on crypto for most individuals, and gains were generally treated as capital receipts outside the scope of income tax. Any positions established and disposed of before the new regime took effect retain the prior treatment.

Loss Offsetting

Under the proposed regime, crypto losses in a given tax year may be offset against crypto gains in the same year — a net position is taxable rather than gross gains. Losses cannot be carried forward to future years and cannot offset income from other sources. This is a meaningful restriction for volatile asset holders: a year in which significant gains and losses both occur may produce a worse net outcome than a year with smaller gains and no losses, if the loss-generating trades fall in a different tax period.

Mining and Staking

Mining income is explicitly excluded from the 8% CGT regime. Mining proceeds are taxed under general income tax rules as business or self-employment income, at standard Cypriot income tax rates of 0–35%. Staking income treatment under the new regime was not fully clarified at the time of the legislation's announcement — individuals with material staking income should seek specific advice on whether the 8% rate, income tax rates, or an exemption applies to their circumstances.

Non-Dom Regime

Cyprus operates a non-domicile (non-dom) tax regime that exempts qualifying residents from Special Defence Contribution (SDC) tax on dividends and interest. The non-dom regime previously also sheltered some income from CGT given that CGT on crypto was not levied. Under the new 8% regime, whether non-dom status provides any exemption from the crypto CGT is a critical and as-yet unresolved question in the proposed legislation. Until this is explicitly clarified by the Tax Department, non-dom residents should not assume the prior exemption continues to apply to crypto gains under the new framework.

Reporting

All taxable crypto disposals are declared in the annual income tax return. The filing deadline in Cyprus is 31 July for the prior calendar year (electronic filing). CySEC-licensed CASPs report transaction data under DAC8 from 2026. Cyprus participates in CRS automatic exchange of information within the EU.