Cyprus As A Corporate Hub In The Post-Pillar Two Era

In December 2025, the Cyprus Parliament voted into law the new tax rules under the so-called Cyprus tax reform, following two years of discussions, public consultations, and feedback received from the public, industry professionals, and various bodies, organizations and associations.

Implementing Pillar Two

One of the most notable changes introduced is the full implementation of Pillar Two. As a result, the Cyprus corporate tax rate, which previously stood at 12.5%, has been increased to 15%. Effective from 01 January 2026, this corporate tax rate applies universally to all Cyprus tax resident companies (including any permanent establishments of foreign entities), demonstrating Cyprus’ commitment to implementing the OECD’s global minimum taxation framework.