What this covers
If you dispose of crypto while you are Cyprus tax resident, or while you are physically in Cyprus, the profit is taxed at 8%. That rule started on 1 January 2026 and it is new. It applies to everyone, whether you trade daily or sold once, and it applies to companies on the same terms as individuals.
This guide sets out what counts as a disposal, how the profit is worked out, why losses are close to worthless, and what happens to coins you bought years before the rule existed. That last point catches most people.
The rule
Article 20E of the Income Tax Law charges 8% on profits from the disposal of crypto-assets. It was inserted by N.244(I)/2025 and came into force on 1 January 2026.
Four things follow directly from the wording of the article and the Tax Department’s FAQ, and each of them surprises somebody:
It is not optional. Article 20E applies to every disposal in its scope. There is no election, and no way to have the profit taxed at ordinary income tax rates instead.
It does not care whether you were trading. The FAQ is explicit that Article 20E covers every disposal, whether or not it happens in the course of a business. The old argument about whether you were an investor or a trader does not change the rate.
It applies to disposals from 1 January 2026 regardless of when you bought. There is no rebasing to a 1 January 2026 value.
Unrealised gains are not taxed. A rise in market value with no disposal is nothing.
Who is in scope
| Who | When Article 20E applies |
|---|---|
| Individual, Cyprus tax resident | On every disposal |
| Individual, not Cyprus tax resident | On disposals made while physically present in Cyprus |
| Company, Cyprus tax resident | On every disposal |
| Company, not Cyprus tax resident | On disposals made by a permanent establishment it keeps in Cyprus |
For the two non-resident cases, any double tax treaty with your country of residence is applied on top.
What counts as a disposal
Article 20E(3)(b) lists four events, and only four:
| Event | Profit is measured as |
|---|---|
| Sale | Sale price, less acquisition cost and direct transaction costs |
| Gift, which includes inheritance | Market value at the moment of the gift, less acquisition cost and direct transaction costs |
| Swapping one crypto-asset for another | Market value of what you gave up at the moment of the swap, less its acquisition cost and direct transaction costs |
| Using crypto to pay for something | Market value at the moment of payment, less acquisition cost and direct transaction costs |
A crypto-to-crypto swap is a taxable disposal. So is paying for something in Bitcoin. So is giving coins away. If the sale is to a connected person as defined in Article 33 of the Income Tax Law, the sale price used must be market value.
What counts as a crypto-asset
Article 20E(3)(a) borrows the definition from Article 3(1)(5) of Regulation (EU) 2023/1114, better known as MiCA: a digital representation of value or of a right that can be transferred and stored electronically using distributed ledger technology or similar technology.
The Department reads that as covering cryptocurrencies such as Bitcoin, utility tokens, asset-referenced tokens and e-money tokens such as Tether. As a general rule it does not cover NFTs. Anything outside the definition falls back to the ordinary income tax rules in Parts III and V of the Income Tax Law, which means ordinary rates rather than 8%.
Nothing else is deductible
The 8% is a special method of taxation, so the ordinary computation rules do not apply. Beyond acquisition cost and the direct transaction costs of the disposal, no expense can be deducted, even one directly related to the disposal. A company cannot claim the notional interest deduction against Article 20E profits either, because Part III of the Income Tax Law does not apply to them.
Cost basis and FIFO
Where you bought the same asset at different times and different prices, the coins you acquired first are treated as the ones you disposed of. That is first in, first out.
This is worth being precise about. FIFO is not in Article 20E. The statute is silent on cost matching. FIFO is the Tax Department’s stated position in its FAQ on the new regime, which is the Department’s own published interpretation and is what it will apply on an audit. If your position turns on cost matching and the amounts are large, the Department points to the tax ruling route under Circulars 2015/13 and 2016/13.
Losses are ring-fenced, and they expire
Article 20E(2) is unusually harsh, and this is the part most people get wrong.
A loss on disposing of crypto can be set against only profits from disposing of crypto, only in the same tax year, and only for the same person. It cannot be carried forward to a later year. It cannot be surrendered to another company in the group, even a group company that made a crypto profit in the same year.
It runs the other way too. Because Article 20E is a special charge, crypto profits cannot be reduced by a loss from any other activity, whether that loss arose in the same year or is being carried forward from an earlier one.
A bad December wipes out a good November. A bad January does nothing at all for the previous December.
Mining, staking and trading are three different regimes
| Activity | Treatment |
|---|---|
| Disposing of crypto you bought | Article 20E, flat 8% |
| Disposing of crypto you mined | Article 20E does not apply. Ordinary income tax at normal rates |
| Staking rewards | Not a disposal. Ordinary income tax at normal rates, on an accruals basis |
| Disposing of crypto received as a staking reward | Article 20E, flat 8% |
Mining is a business activity. Profits are taxable under Article 5(1)(a) or 5(2)(a) of the Income Tax Law at ordinary rates, and Article 20E(4) expressly excludes mined coins. The tax point is the disposal of the mined coins, not the moment of mining and not the moment you receive them. Because this sits in the ordinary rules, the deductions are wider: mining costs incurred wholly and exclusively for the coins disposed of, capital allowances on mining equipment under Article 10 apportioned to those coins, direct transaction costs, and other direct or indirect expenses incurred wholly and exclusively to earn the profit. A company can also claim the notional interest deduction under Article 9B on new capital funding the mining activity.
Staking is also a business activity, but there is no disposal, so Article 20E does not apply to the reward. The reward is taxed at ordinary rates on an accruals basis. It is valued at the earlier of the end of the staking period or the end of the tax year, using the crypto to euro rate on that date. Anything already taxed at an earlier valuation is deducted at the next one, so you are not taxed twice.
When you later dispose of the staked reward coins, that disposal is within Article 20E at 8%, and your cost is the value already taxed as staking income.
Crypto you held before 2026
There is no rebasing. The Department’s FAQ says Article 20E applies to disposals from 1 January 2026 “regardless of the date of acquisition of the crypto-assets disposed of”. Your cost is what you actually paid, not the market value on 1 January 2026. Every euro of gain accumulated since you bought is charged at 8% when you sell.
Cyprus does not apply exit tax to individuals leaving. The FAQ answers this directly: Article 33B exit taxation applies to companies where the transfer falls within Article 33B(1)(a) to (d), covering transfers of assets between permanent establishments or head office, transfer of a business, and transfer of tax residence. It applies whether the destination is an EU member state or a third country, and whether or not a double tax treaty is in force. For individuals, the answer is no.
If you moved to Cyprus already holding crypto
| Where you came from | Cost used in Cyprus | Credit for foreign exit tax |
|---|---|---|
| Another EU member state, company transfer within Article 33B(1)(a) to (d) | The value set by the departing member state, unless it does not reflect market value | No credit. You already got the step-up |
| A third country, company | Original acquisition cost | Yes, under Article 35 or 36, capped at the Cyprus tax on the pre-arrival gain |
| Any country, individual | Original acquisition cost | Yes, under Article 35 or 36, capped in the same way |
The asymmetry matters. An individual who moves to Cyprus does not get a step-up to the value on arrival. They keep their original cost and rely on a credit for whatever exit tax the departing country actually charged, and that credit is capped at the Cyprus tax on the gain up to the date of arrival.
Worked example
You bought 3 BTC at different times and sell 1 in 2026.
- January 2021: 1 BTC for €30,000
- June 2023: 1 BTC for €25,000
- March 2026: 1 BTC for €80,000
In November 2026 you sell 1 BTC for €90,000, with €200 of exchange fees.
- FIFO means the coin sold is the January 2021 one, cost €30,000
- Profit = €90,000 − €30,000 − €200 = €59,800
- Tax at 8% = €4,784
The March 2026 coin is not touched even though buying it at €80,000 would have given a far smaller gain. Nothing else is deductible, and the fact that the gain built up over five years before Article 20E existed makes no difference.
You then move to Cyprus mid-year holding coins your old country taxed on the way out.
Suppose you are an individual, you paid €500,000 for the coins, your former country valued them at €1.2m on departure and charged €250,000 of exit tax, and you later sell for €2m from Cyprus.
- Cost stays at €500,000, not €1.2m
- Profit = €1.5m
- Cyprus tax before credit = €1.5m × 8% = €120,000
- Credit for foreign exit tax = (€1.2m − €500,000) × 8% = €56,000, because the credit is capped at the Cyprus tax on the pre-arrival slice, not at the €250,000 actually paid
- Tax due: €64,000
This mirrors the Department’s own Scenario B in the FAQ, which it confirms applies to individuals as well as companies. Had the foreign exit tax been only €30,000, the credit would be the lower of the two figures, so €30,000, and the tax due would be €90,000.
Declaring and paying it
Crypto profits are declared in your income tax return. Profits taxed under Article 20E, including those arising in a business, go in a separate part of the return that the Department says it is creating for tax year 2026 onwards. At the time of writing that part of the 2026 return has not been published.
The tax is paid through temporary tax, in two instalments, by 31 July and 31 December of the same year. That is Article 24 of the Assessment and Collection of Taxes Law No. 4 of 1978. You work out your own estimate of taxable income and pay accordingly. A revised estimate can be filed up to 31 December. If the temporary tax falls short of the final liability, the balance is paid under Article 38, by the date the income tax return is due. Interest and charges apply under the same law if you get it wrong.
This is the deadline most people will miss, because it falls in the same year as the trade rather than after it.
What commonly goes wrong
Thinking a crypto-to-crypto swap is not a disposal. It is one of the four listed disposal events. Moving from one token to another crystallises a taxable profit in euro even though no euro moved.
Expecting a step-up on 1 January 2026. There is none. The 8% applies to the whole gain since you bought, however long ago that was.
Assuming an individual gets a rebase on moving to Cyprus. They do not. Only companies transferring in from another EU member state under Article 33B pick up the departing state’s value as cost. Individuals keep their original cost and rely on a capped credit.
Carrying a crypto loss forward. It dies at the end of the tax year. Realising a loss in January to shelter a gain from the previous December achieves nothing.
Trying to shelter crypto profits with business or rental losses. Article 20E is ring-fenced in both directions.
Treating mined coins as an 8% asset. They are excluded from Article 20E and taxed at ordinary rates. Which side of the line a coin falls on depends on how you obtained it, so mined and bought coins need separate records.
Forgetting staking is taxed before you sell anything. The reward is taxed as it accrues, valued at the end of the staking period or the end of the tax year, whichever comes first. Waiting to sell does not defer it.
Waiting until the tax return to pay. The tax runs through temporary tax, due 31 July and 31 December of the year of the disposal.
Assuming non-dom status helps here. It does not. Non-dom status affects the Special Defence Contribution on dividends and interest. Article 20E is income tax, and everyone pays it.
Where to check
The Tax Department publishes its full FAQ on the new regime, which is where the FIFO rule, the mining and staking treatment and the three exit tax scenarios come from. The statutory wording is Article 20E of the Income Tax Law, inserted by N.244(I)/2025 and reproduced in the consolidated law on CyLaw. Both are Greek only.
Where a case is genuinely unclear, the Department invites a tax ruling application to
taxruling@tax.mof.gov.cy under Circulars 2015/13 and 2016/13, on payment of the relevant
fee.
Cost matching across several exchanges and years is the part that goes wrong in practice. Have your computation checked by a firm licensed to advise in Cyprus before you file.
