Cyprus extends tax incentive for investments in innovative SMEs

The Cypriot Commissioner for State Aid Control has approved an extension of a tax incentive program aimed at encouraging private investments in innovative small and medium-sized enterprises (SMEs). The measure allows independent investors to deduct eligible investment costs from their taxable income, subject to an annual cap of €150,000. Additionally, the tax deduction cannot exceed 50% of the investor's taxable income.

The initiative, which officially supports funding for research, development, and innovation, is set to be extended until June 30, 2027. While the decision was published in the Official Gazette of the Republic in mid-October 2026, the formal implementation remains contingent on the final passage of the associated bill by the House of Representatives. Once enacted, the law will be finalized through its publication in the Official Gazette, providing a formal legal framework for individual investors to claim these benefits against their tax obligations.