Nicosia: Commissioner of Taxation Soteris Markides has informed CNA that the Tax Department is actively working to ensure a smooth transition from the current tax system to the newly approved framework. This follows the voting of the new tax structure by the House of Representatives in December 2025.
According to Cyprus News Agency, Markides stated that the new tax regime is expected to result in a reduction in taxation for all taxpayers, with variations depending on their specific data. Salaried employees are the primary group impacted by these changes, as the new provisions will begin in January 2026, marking the first month when Income Tax will be withheld from their salaries under the revised system.
Markides highlighted the introduction of several new deductions and allowances that were not previously available. Among these is a deduction for home insurance against natural disasters, capped at £500. Additionally, insurances for permanent total or partial disability have been included as means to reduce taxable income, alongside existing deductions for life insurance.
Further elaborating on the changes, Markides mentioned that deductions have been introduced based on family income criteria, which vary according to the number of children. These include deductions for dependent children, rent on a primary residence, or interest on a serviced loan, up to £2,000. There are also deductions for energy upgrades to a primary residence or the purchase of an electric car, capped at £1,000 annually.