The rule since 1 January 2026: 8% on crypto disposal gains
The Income Tax (Amendment) Law (N. 244(I)/2025) took effect on 1 January 2026 and adds a new Article 20E to the Income Tax Law of the Republic of Cyprus. According to the Tax Department, the gain of any person from the disposal of crypto-assets is taxed at 8%. The rule is not limited to professional traders: the Tax Department's own worked examples apply it to both an individual and a company. It covers Cyprus tax residents and, through a separate amendment to Article 5, non-residents. Which gains of a non-resident count as taxable in Cyprus is not covered by the published guidance we checked; ask a tax adviser. This guide covers the Republic of Cyprus only; the northern part of the island has its own tax system. Earlier versions of this guide said Cyprus had no formal crypto rules and that individual gains were exempt. That is no longer correct for 2026.
What counts as a disposal
The law defines a disposal of crypto-assets as selling them, giving them away (a gift), exchanging one crypto-asset for another, and using a crypto-asset as a means of payment. Swapping one token for another is therefore a taxable event even if you never convert to euros. "Crypto-assets" has the meaning given in EU Regulation 2023/1114 (MiCA). Whether items such as NFTs, some stablecoins or DeFi positions fall inside that definition is not covered by the published guidance we checked; ask a tax adviser if you hold them.
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Tax comparison
| Item | UK | Cyprus Standard | Cyprus Non-Dom |
|---|---|---|---|
| Gross income | €80,000 | €80,000 | €80,000 |
| Income tax | €17,480 | €16,300 | €16,300 |
| Social insurance / GeSY | €3,611 | €8,184 | €8,184 |
| Total tax | €21,091 | €24,484 | €24,484 |
| Effective rate | 26.4% | 30.6% | 30.6% |
| Est. annual saving | n/a | €-3,393 | €-3,393 |
What is not covered: mined crypto and other income
Disposals of crypto-assets that you acquired through mining are expressly excluded from Article 20E. The Tax Department's example taxes gains on mined coins under the ordinary income tax rules (Parts III and V of the law, at the standard Second Schedule rates) instead of the 8% rate. The law also says any crypto-related gain that falls outside Article 20E is taxed under those ordinary rules. Where staking rewards, airdrops, lending or DeFi yield, or an activity amounting to a trading business, fall is not covered by the published guidance we checked; ask a tax adviser. Do not assume the 8% rate applies to them.
How losses work
Losses on crypto disposals can be set off only against gains from crypto disposals in the same tax year. They cannot be carried forward and cannot be set against other income. A company cannot pass them to another group company under the group-loss rules (Article 13). The Tax Department's example: in 2026 a person has a €400,000 sale gain (of which €300,000 relates to mined coins), a €200,000 gain on a crypto-to-crypto swap and a €400,000 loss from using crypto as payment. The 8% base is €0: the €300,000 mined-coin gain is taxed under ordinary rules, and the other items net to a €100,000 loss. That loss cannot be used in 2027, when a €150,000 sale gain is taxed at 8%, giving €12,000 of tax.
Company example
In another Tax Department example, a company with an €800,000 sale gain (of which €300,000 relates to mined coins), a €700,000 swap gain and a €400,000 payment loss has an 8% base of €800,000 and tax of €64,000. A €500,000 crypto loss in another group company is ignored. The €300,000 mined-coin gain and €1,000,000 of consulting profit are taxed under the normal rules.
What is still unclear
The published guidance we checked does not answer these questions, so treat each as open and ask a tax adviser: how Article 20E interacts with the Special Defence Contribution; whether non-dom status changes the result; how cost basis is calculated, including for coins held before 2026; how gift disposals are valued; how a non-resident's Cyprus-taxable gains are determined; and how staking, airdrops and DeFi income are classified. The Tax Department publishes an explanatory guide and FAQ for natural persons (new editions dated 11 May 2026, in Greek) on its Tax Reform 2026 page.
Record-keeping and what to do now
Every disposal, including swaps and payments in crypto, needs a record, because gains and losses are netted by tax year. Keep for each year: all transactions with dates, acquisition cost and disposal value in euros, wallet and exchange identifiers, and how each coin was acquired (purchase, mining or other), since mined coins are treated differently. Tracking tools such as Koinly or CoinTracking can export this. Because the rules are new and several points are open, get written advice from a Cyprus accountant or tax lawyer before filing, particularly for large holdings, mining, staking or DeFi income, or if you are not tax resident in Cyprus.