🇨🇾 vs 🇲🇹

Cyprus vs Malta Tax Comparison 2026

Two Mediterranean EU islands known for tax efficiency. Which offers the better deal for expats and businesses?

Last updated: December 2026

Overview: EU Tax-Friendly Islands

Cyprus and Malta are both small, English-speaking EU island nations that have built reputations as tax-efficient jurisdictions. Both offer attractive regimes for individuals and businesses while maintaining EU membership benefits.

Cyprus is known for its non-domicile rules and 12.5% corporate tax rate. Malta offers a unique remittance basis for non-doms and an effective corporate tax as low as 5% through its imputation system. Both attract international businesses, expats, and retirees.

Quick Comparison at €60,000 Salary (Standard Employment)

Metric 🇨🇾 Cyprus 🇲🇹 Malta
Gross Salary €60,000 €60,000
Income Tax ~€7,000 ~€12,700
Social Contributions ~€5,000 (8.3%) ~€4,200 (10%, capped)
Healthcare Levy ~€1,470 (GESY 2.65%) Included in social
Total Deductions ~€13,470 ~€16,900
Net Take-Home ~€46,530 ~€43,100
Effective Rate ~22.5% ~28.2%

Key Insight

  • Cyprus wins on employment income: Lower tax rates and generous €19,500 exemption
  • Malta's remittance basis: Non-doms only taxed on income brought to Malta
  • Business owners: Malta's effective 5% corporate tax is lower than Cyprus's 12.5%
  • Both tax-free on dividends: Neither taxes dividends for individuals

Special Tax Regimes

🇨🇾 Cyprus Non-Domicile Status

17-year exemption on dividends and interest income

Available to: Anyone not born in Cyprus and not tax resident for 17+ of past 20 years

Benefit: Zero tax on dividends, interest, and certain other income types

Duration: 17 years from becoming Cyprus tax resident

🇨🇾 Cyprus 50% Income Exemption

50% exemption on employment income for high earners taking first job in Cyprus

Requirements: Salary €55,000+ and not resident in Cyprus in prior 3 years

Duration: 17 years (previously 10 years)

Massive savings for well-paid executives and professionals

🇲🇹 Malta Remittance Basis (Non-Doms)

Only foreign income remitted to Malta is taxed

Available to: Non-domiciled residents of Malta

Foreign income kept abroad = €0 Malta tax

Minimum tax: €5,000/year to maintain status

🇲🇹 Malta Global Residence Programme

15% flat tax on foreign income remitted to Malta

Requirements: Non-EU nationals, property purchase/rental, health insurance

Minimum tax: €15,000/year

Best for: Non-EU high earners wanting EU access

Tax System Comparison

Income Tax Brackets

Feature 🇨🇾 Cyprus 🇲🇹 Malta
Tax-Free Threshold €19,500 €9,100
Number of Brackets 4 brackets 4 brackets
Top Rate 35% 35%
Top Rate Threshold €60,000+ €60,001+
Social Contributions 8.3% 10% (capped €54k)

Cyprus Tax Brackets (2024/25)

Income Band Rate
€0 - €19,5000%
€19,501 - €28,00020%
€28,001 - €36,30025%
€36,301 - €60,00030%
Over €60,00035%

Malta Tax Brackets (2024/25 - Residents)

Income Band Rate
€0 - €9,1000%
€9,101 - €14,50015%
€14,501 - €19,50025%
€19,501 - €60,00025%
Over €60,00035%

Note: Malta has different rates for married couples and parents

Business & Investment Taxes

Tax Type 🇨🇾 Cyprus 🇲🇹 Malta
Corporate Tax Rate 12.5% 35% (effective 5%*)
Dividend Tax (Personal) 0% (non-doms) 0% (remittance basis)
Capital Gains Tax 0% (securities) 0% (securities)
Interest Income 0% (non-doms) 15% withholding (or 35%)
VAT 19% 18%
Inheritance Tax 0% 5% stamp duty
Wealth Tax 0% 0%

*Malta's 35% corporate tax can be reduced to effective 5% through its tax refund system for shareholders

For Business Owners

  • Malta's refund system: 6/7 tax refund to shareholders = effective 5% rate
  • Cyprus IP Box: 80% deduction on qualifying IP income = 2.5% effective rate
  • Holding companies: Both excellent for holding structures (participation exemptions)
  • Both EU members: Access to EU parent-subsidiary directive benefits

Pros and Cons

🇨🇾 Cyprus

  • High €19,500 tax-free threshold
  • 50% income exemption for high earners (17 years)
  • Non-dom dividend/interest exemption
  • No capital gains on securities
  • No inheritance tax
  • Larger island, more space
  • Higher VAT (19%)
  • Corporate tax 12.5% (vs Malta's effective 5%)
  • Limited flight connections

🇲🇹 Malta

  • Effective 5% corporate tax rate
  • Remittance basis for non-doms
  • Strong financial services sector
  • Better flight connections to Europe
  • Well-developed gaming industry
  • Lower €9,100 tax-free threshold
  • Higher personal tax rates mid-range
  • Very small, limited space
  • Traffic and density issues

Who Wins at Different Scenarios?

Employee (€50-100k Salary)

Winner: Cyprus 🇨🇾

Cyprus's €19,500 tax-free threshold and lower rates at mid-income levels make it clearly better for employees. Add the 50% income exemption for qualifying newcomers, and Cyprus is exceptionally attractive for employed professionals.

Business Owner / Entrepreneur

Winner: Malta 🇲🇹

Malta's effective 5% corporate tax through the refund system is hard to beat. For entrepreneurs building a company, the ability to retain 95% of profits (rather than 87.5% in Cyprus) makes a significant difference over time.

Investor / Passive Income

Winner: Cyprus 🇨🇾

Cyprus non-dom status offers zero tax on dividends, interest, and capital gains from securities. Malta's remittance basis is good, but Cyprus's blanket exemption is simpler and more generous for pure investment income.

Retiree

Winner: Depends on Pension Source

Both can be excellent. Cyprus's non-dom status helps with investment income. Malta's remittance basis means foreign pensions kept abroad aren't taxed. Consider climate, healthcare, and lifestyle preferences alongside tax.

Digital Nomad / Remote Worker

Winner: Cyprus 🇨🇾

Cyprus offers the 50% income exemption for new residents earning €55k+ and has more space, beaches, and lower density than Malta. Malta is smaller and more congested.

The Bottom Line

  • Employees: Cyprus wins with its generous tax-free threshold and 50% exemption
  • Business owners: Malta's effective 5% corporate tax is unbeatable
  • Investors: Cyprus's non-dom rules offer simpler, broader exemptions
  • Lifestyle: Cyprus is larger and less crowded; Malta has better EU connections

Cost of Living Comparison

Expense 🇨🇾 Cyprus 🇲🇹 Malta
Rent (1BR City Center) ~€800-1,100/month ~€1,000-1,400/month
Groceries (Monthly) ~€300-350 ~€280-330
Dining Out ~€12-20 ~€15-25
Healthcare GESY public system (2.65%) Free public / private options
Car Ownership Essential but cheaper High import duties, traffic
Overall 10-15% cheaper More expensive

Cyprus is generally more affordable, with lower rents (especially outside main cities) and more space. Malta has experienced significant price increases due to limited space and high demand from expats and businesses.

Calculate Your Exact Tax

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