On 18 March 2026, the Cyprus Tax Department announced the 10-year government bond yield rates for a number of countries as at 31 December 2025. When increased by 5%, these rates can be used as reference rates for calculating the Notional Interest Deduction (NID) for the 2026 tax year.
The NID is an annual tax-deductible expense calculated on ‘New Equity’ (funds introduced into a company on or after 1 January 2015) used to generate taxable income. Following the increase in the Cyprus Corporate Income Tax (CIT) rate to 15% from 1 January 2026, , the NID remains one of the most effective tools for companies to manage their tax burden, with the potential toreduce the effective tax rate.
The application of NID is governed by Article 9B of the Income Tax Law of 2002 as amended. It provides for a notional interest deduction on new equity introduced into Cyprus tax resident companies, or permanent establishments of foreign companies in Cyprus, from 1 January 2015 onwards, provided those
