Cyprus

Cyprus introduced a significant change to its crypto tax framework with an 8% flat capital gains tax on crypto disposal gains, enacted under Article 20E of the Income Tax Law — passed by the House of Representatives in December 2025, published in the Official Gazette on 31 December 2025, and in force since 1 January 2026. 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 applies to all Cyprus tax residents regardless of domicile: non-dom status does not exempt crypto disposal gains from the 8% tax, and the non-dom regime continues to shelter only dividend and interest income from Special Defence Contribution. CySEC licenses Crypto Asset Service Providers (CASPs) under MiCA, and DAC8 exchange reporting has been active from 2026.

The position described here reflects the enacted regime as published in the Official Gazette. Individuals with significant Cyprus crypto positions established before 1 January 2026 should confirm how the effective date applies to their specific holding and disposal timeline.

Core Tax Treatment

Under Article 20E, 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. 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 Article 20E, 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 Article 20E has not been fully clarified in Tax Department guidance — 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. This SDC exemption does not extend to the 8% crypto capital gains tax under Article 20E: non-dom status does not exempt crypto disposal gains from the 8% tax, which applies to all Cyprus tax residents regardless of domicile. The non-dom regime continues to shelter only dividend and interest income from SDC, as it always has — it has no bearing on crypto capital gains tax liability.

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.