Since 1 January 2026 Cyprus taxes profit on the disposal of crypto-assets at a flat 8%. The charge lives in a new article 20E of the Income Tax Law, inserted by the Income Tax (Amending) (No. 4) Law of 2025 and published in the Official Gazette on 31 December 2025. Before that, Cyprus had no crypto-specific provision at all, and your tax bill turned on whether the Tax Department accepted you were an investor rather than a trader. For ordinary buying and selling that argument is now over. For mining, staking and DeFi yield it is not.
An 8% rate, kept apart from everything else you earn
Article 20E applies to any person, which means individuals and companies are taxed the same way on a crypto gain. That is unusual. A Cyprus company pays 15% corporation tax on its trading profit but 8% on a profitable token disposal. An employee whose salary reaches the top 35% band pays 8% on the crypto profit sitting alongside it.
The profit is also ring-fenced: it is not added to your other income, so a good year in crypto cannot push your salary or rental income into a higher band. The 2026 income tax bands run from a €22,000 tax-free allowance up to 35% above €72,000, and article 20E sits outside that scale entirely.
Capital gains tax does not come into it either. Under the Capital Gains Tax Law (Law 52 of 1980) the 20% charge only reaches Cyprus immovable property and shares in unlisted companies that own some, which is why Cyprus CGT has never touched a token. The 8% is an income tax, not a capital gains tax, and it is the whole charge.
What the law treats as a disposal
Four events trigger the tax, and only one of them puts cash in your bank account:
| Event | Taxed under article 20E? |
|---|---|
| Selling crypto for euro or another currency | Yes |
| Swapping one crypto-asset for another | Yes |
| Paying for goods or services in crypto | Yes |
| Giving crypto away | Yes |
| Buying and holding | No, there is no tax until disposal |
Profit is the disposal proceeds less what you paid for the asset and the costs directly tied to the transaction, such as exchange fees and commissions. Where no money changes hands, as with a swap or a payment, the proceeds are the euro market value at the moment of the disposal.
The practical sting is in row two. Rebalancing a portfolio from one token into another is a taxable disposal even though nothing was cashed out, so an active year can generate a tax bill with no euro in hand to pay it. Each transaction stands on its own, which makes a clean record of acquisition dates, quantities, cost and disposal values the difference between an 8% computation and an argument.
"Crypto-asset" takes its meaning from the EU's Markets in Crypto-Assets Regulation, Regulation (EU) 2023/1114, so the regime covers bitcoin, ether, stablecoins, utility tokens and most non-security NFTs. Tokens that qualify as financial instruments under MiFID II, and e-money, fall outside that definition and are taxed under whatever rules their real character attracts.
Mining is outside the 8%, and staking is unresolved
Crypto obtained by mining is deliberately excluded. Mining is treated as a business activity and taxed under the ordinary rules, at 15% for a company or on the progressive scale up to 35% for an individual. Anyone mining at scale in Cyprus is therefore in a worse position under the new regime than a passive holder, though ordinary business expenses come off the profit in the usual way and trading losses behave normally rather than being ring-fenced.
Staking rewards, lending interest and DeFi yield are the genuine grey area. They arrive as income rather than as the proceeds of a disposal, so the natural reading is that the reward is ordinary income when you receive it and article 20E applies later, when you sell the token you were paid. The Tax Department has not published guidance settling the point. If a meaningful part of your return comes from yield rather than price, get the treatment confirmed in writing before you file rather than assuming the 8% covers it.
Losses shelter crypto gains, and nothing else
Article 20E overrides the general loss rules. A crypto loss can be set against crypto gains in the same tax year, and that is the end of it. It cannot be carried forward to a future year the way ordinary trading losses can, it cannot be carried back, and it cannot reduce your salary, rental or business income.
Timing therefore does real work. Gains in January and losses the following February fall in different tax years and never meet. If you are sitting on an unrealised loss and have already banked a gain in the same year, realising the loss before 31 December is the only way it will ever be worth anything.
Whether Cyprus taxes you at all depends on residency
Article 20E fits inside the normal territorial rules. Cyprus tax residents are taxed on worldwide income, so a disposal on a Dubai or US exchange is still within the charge. Non-residents are taxed only on Cyprus-source income, which rarely catches a personal crypto portfolio.
You become tax resident by spending more than 183 days here, or through the 60-day rule if you keep a home in Cyprus, do not spend more than 183 days in any other country and are not tax resident anywhere else. Our guide to tax residency and non-dom status works through both tests, and the non-dom checker runs your own dates against them.
One myth is worth killing here. Non-dom status exempts you from the Special Defence Contribution on dividends, interest and rent for 17 years, and people arriving with a portfolio often assume it makes crypto tax-free too. It does not. SDC never applied to crypto disposals in the first place, so a non-dom and a domiciled resident both pay the same 8%. The saving from non-dom status shows up on the dividends you take out of a company, not on the tokens you sell.
The exchanges are now reporting
Cyprus transposed the EU's DAC8 directive, Directive (EU) 2023/2226, through Law 38(I)/2026, published in the Official Gazette on 27 March 2026 and applying from 1 January 2026. Crypto-asset service providers have been collecting reportable data on their users' 2026 transactions since the start of the year, with the first reports and exchanges between tax authorities due in 2027.
The consequence is straightforward. From the 2026 tax year the Tax Department will receive transaction data from regulated exchanges directly, including accounts held outside Cyprus but inside the reporting net. An 8% rate on a declared gain is a cheap outcome next to a reconstruction exercise two years after the event.
What is still unclear
Detailed Tax Department guidance on article 20E has been slow to arrive. The cost-basis method for a wallet holding tokens bought at many different prices has not been formally confirmed, the treatment of DeFi positions is unaddressed, and the boundary between a non-security NFT and a financial instrument will produce arguments. Where the law is quiet, keep contemporaneous records and take a position you can defend, rather than picking the most favourable reading and hoping.
Sorting out a Cyprus crypto position? Check your residency dates with the non-dom checker, then take the transaction history to a crypto and fintech lawyer or tax adviser from the directory before you file. This article states the position as at September 2026, with Tax Department guidance still awaited.