Cyprus Compliance Report

Regulatory Overview

Regulatory Status

Some rules exist but significant gaps; draft legislation or limited guidance

Key Regulator(s)

Cyprus Securities and Exchange Commission, Central Bank, EU Council

Primary Legislation

Directive (EU) 2015/849 (4AMLD): The foundational directive, establishing the ri, Directive (EU) 2018/843 (5AMLD): Crucially extended the scope of EU AML rules to, Directive (EU) 2018/1673 (6AMLD): Harmonized the definition of money laundering, The Prevention and Suppression of Money Laundering and Terrorist Financing Law o, Regulatory Administrative Act 342/2021, Regulation (EU, e.g., Foreign Direct Investment Screening Law, AML Directive, Law 87(I, An older but relevant link detailing the law: https://www.cysec.gov.cy/en-GB/leg, Directive 2014/65/EU

Travel Rule

Not adopted

Tax Reporting

Cyprus introduced a dedicated crypto tax framework via new Article 20E of the Income Tax Law, effective January 1, 2026, replacing the previous application of existing tax laws by analogy.. Tax treatment in Cyprus is determined by objective 'substance over form' rules requiring genuine economic activity and demonstrated management & control, rather than by the holder's subjective intention (e.g., short-term vs. long-term trading).. Not Legal Tender: Cryptocurrencies are not recognized as legal tender in Cyprus.. Under Cypriot law implementing the EU MiCA framework, certain crypto-assets may be classified as financial instruments if they qualify as transferable securities or financial instruments under MiFID II, while general cryptocurrencies not meeting that threshold remain outside that classification. The blanket statement that cryptocurrencies are generally not financial instruments is outdated due to MiCA implementation and CySEC's 2026 regulatory regime.. Scope: Capital Gains Tax in Cyprus applies exclusively to gains arising from the disposal of immovable property situated in Cyprus, and does not apply to shares, securities, or crypto assets.

Key Facts

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