The Turkish Republic of Northern Cyprus occupies the northern part of the island of Cyprus. It is recognized as a sovereign state solely by Turkey; the United Nations and the vast majority of states consider the area part of the Republic of Cyprus, currently under Turkish military occupation. Despite the lack of broad recognition, the TRNC operates an independent domestic legal and tax system.
Companies pay a flat 10% corporate tax on net profits (Law 41/1976), followed by a 15% income tax on the after-tax remainder, for an effective combined burden of roughly 23.5%. International Business Companies (which must operate entirely outside the TRNC) pay only 1% on net taxable profit, and qualifying Free Zone companies are exempt from corporate tax altogether.
Individual income is taxed progressively; published 2026 brackets run up to 37% for income above ₺236,500, with lower bands reported as low as 0-10% depending on the source consulted.
The standard KDV (VAT) rate is 16%. Free Zone and qualifying International Business Company transactions fall outside the scope of TRNC VAT. New-build property purchases are subject to a separate 5% VAT plus other property-specific transfer taxes.
Given the TRNC's isolation from the international tax treaty network (a direct consequence of its recognition status), it has essentially no double tax treaties in force and CFC-style attribution rules were not identified. Confirm current specifics with a TRNC-licensed advisor before relying on this summary for planning.