By Nexora Cyprus editorial team · Reviewed by an ICPAC-registered Cyprus tax adviser engaged by Nexora
Cyprus has one of the cleanest capital-gains regimes in the EU: 0% on the disposal of shares and securities, 20% on gains from Cyprus-situs immovable property. The narrow look-through rule for property-rich companies and the 1980 exemption are the two places founders need to pay attention.
Written by the Nexora Cyprus editorial team · reviewed by an ICPAC-registered tax adviser engaged by Nexora.
Quick Summary
Cyprus does not impose a general capital gains tax. The Cyprus CGT regime applies narrowly: 20% on gains from the disposal of (a) Cyprus-situs immovable property, or (b) shares in a company that derives its value mainly from Cyprus immovable property (the look-through rule). Gains on shares and securities not falling into the look-through are 0%. Acquisitions made before 1 January 1980 benefit from a market-value rebasing. Non-doms can layer the 0% personal-CGT framework on top of zero-SDC dividends and zero-CIT participation exemption — making Cyprus exceptionally efficient for share-based wealth creation. **YMYL article — engage an ICPAC-registered Cyprus tax adviser before relying on positions for specific disposals.**
Cyprus capital gains tax (under the Capital Gains Tax Law of Cyprus, Cap. 119, as amended) is a narrowly-targeted tax. It applies to two categories of disposal:
Everything else is 0% CGT. Sale of shares in a Cyprus trading company, sale of shares in a foreign subsidiary, sale of bonds, sale of investment portfolios, sale of crypto-assets (subject to character analysis) — none of these attract Cyprus CGT.
Cyprus's framework treats most capital gains as outside the CGT base. This is the single most important reason Cyprus is competitive for share-based wealth structures:
The 0% on shares is a direct legislative choice — Cyprus chose not to extend CGT beyond Cyprus-situs property. The framework predates the 2026 reform and continues unchanged.
Where the disposal does fall within the Cyprus CGT base, the rate is 20% on the chargeable gain. The chargeable gain is computed as:
Chargeable gain = Sale proceeds − Acquisition cost − Allowable expenses − Personal lifetime exemptions (where applicable)
Cyprus CGT — chargeable gain mechanics
| Element | Treatment | Notes |
|---|---|---|
| Acquisition cost | Original purchase price + transfer fees + capital improvements | Pre-1980 acquisitions are rebased to 1 January 1980 market value |
| Allowable expenses | Legal fees, agent commissions, capital improvements | Strictly direct-cost-of-disposal items |
| Indexation | Cost is indexed by CPI to the disposal date | Reduces the inflationary component of the gain |
| Lifetime personal exemptions | Up to €17,086 standard / higher for primary residence and farmland | Per individual; cannot be carried forward unused |
| Rate on residual gain | 20% | Cyprus CGT rate |
The indexation mechanism is genuinely valuable for long-held property — a 30-year hold with significant CPI inflation may see a substantial portion of the nominal gain stripped out before the 20% rate applies. Confirm the exact indexation factor with the Cyprus Tax Department for the specific acquisition and disposal dates.
Cyprus's CGT extends to share disposals where the underlying company derives its value mainly from Cyprus immovable property. This is the look-through rule and is the single most important place where the otherwise-clean 0%-on-shares framework is qualified.
The look-through rule is the most common source of unexpected Cyprus CGT exposure for relocators. A Cyprus property-holding company that looks like a 'normal share' for the founder is in fact a property-investment vehicle for CGT purposes. Always run the test before disposal.
For property and shares acquired before 1 January 1980, the acquisition cost for CGT purposes is the market value as at 1 January 1980 (rather than the actual historic acquisition cost). This is a generous mechanism that strips out the pre-1980 component of any gain entirely.
Practical relevance is mainly for inherited Cyprus family-owned property. For acquisitions in the 21st century, the 1980 rebasing has no effect.
The Cyprus 0%-on-shares CGT framework stacks naturally with the Cyprus non-dom regime to make Cyprus exceptionally efficient for founders and investors:
The combined effect: a Cyprus-resident, non-domiciled founder using a Cyprus holding company to own foreign-trading-company shares can typically realise share-sale gains, receive dividends, and earn interest with extremely low Cyprus tax leakage during the 17-year non-dom window. Foreign-jurisdiction tax on the underlying activities is a separate analysis.
Nexora handles Cyprus CGT analysis as part of our [Tax Structuring](/services/tax-structuring) and [Tax Residency + Non-Dom](/services/tax-residency) engagements.
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Generally no. Cyprus CGT applies only to gains from the disposal of Cyprus-situs immovable property, and to gains from disposing of shares in a company that derives its value mainly from Cyprus immovable property (the look-through rule). Gains on shares not falling within the look-through are 0%. This includes shares in Cyprus and foreign trading companies, listed equities, ETFs, bond portfolios, and unlisted securities.
20% — but it applies only to the narrow category of disposals within the Cyprus CGT base (Cyprus-situs immovable property + property-rich-company shares under the look-through rule). The 20% rate is applied to the chargeable gain after acquisition cost, allowable expenses, indexation, and lifetime personal exemptions.
Crypto-asset disposals fall outside the formal Cyprus CGT base because they are not Cyprus-situs immovable property. The treatment depends instead on whether the disposals are characterised as trading (taxed as trading income) or as capital investment (typically not taxed in Cyprus). The trading/investment characterisation is fact-and-circumstance specific — frequency of disposals, intention, and holding patterns all matter. Engage an ICPAC-registered adviser before relying on a specific characterisation.
Where a company derives its value mainly from Cyprus immovable property (typically more than 50% of asset value attributable to Cyprus property), the disposal of shares in that company is taxed as if the underlying property had been sold. The Cyprus 20% CGT rate applies on the property-attributable share of the gain. The rule prevents structures from circumventing the 20% on direct property disposals by selling shares of a property-holding company instead.
Yes. Cyprus individuals benefit from once-in-a-lifetime personal CGT exemptions: a standard exemption (€17,086 last published), a higher exemption for primary residence disposals (subject to occupation conditions), and a higher exemption for agricultural land. The exemptions cannot be carried forward unused — they apply at first eligible disposal. Sequencing disposals across spouse / family-member ownership chains can preserve more exemption capacity.
Cyprus CGT and SDC are separate regimes. The non-dom regime (zero SDC on dividends and interest for 17 years) operates alongside the 0% CGT on shares. Together, a Cyprus-resident non-domiciled individual can realise share gains (0% CGT), receive dividends (0% SDC during the non-dom window), and earn interest (0% SDC) — making Cyprus exceptionally efficient for share-based wealth creation. Foreign-jurisdiction tax on the underlying activities is independent of this analysis.
Disclaimer: This article is for informational purposes only and does not constitute legal, tax, or financial advice. Tax laws change frequently. Consult a qualified Cyprus adviser for guidance specific to your situation. The information on this page is general guidance only and does not constitute legal, tax, accounting, immigration or financial advice. Specific advice should be obtained based on the facts of each case.
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