How does the 2025 US tax law (NCTI) affect a Cyprus company?
Short answer
For tax years starting after 31 December 2025, GILTI became net CFC tested income (NCTI). The return on physical assets is no longer excluded, the deduction falls to 40% and the credit for foreign tax rises to 90%. Cyprus's 15% rate is below the 18.9% needed for the high-tax exception.
The 40% deduction and the foreign tax credit are available to US corporations and to individuals who make a section 962 election; an individual owner without that election gets neither.
The high-tax exception is optional and applies when the foreign tax is more than 90% of the 21% US corporate rate, that is 18.9%. A company paying Cyprus tax at 15% does not reach it, so NCTI usually applies to its income.
Sources
- Public Law 119-21 (GovInfo) govinfo.gov
- IRS: instructions for Form 8993 irs.gov
- eCFR: 26 CFR 1.954-1, the high-tax exception ecfr.gov
Information, not advice. This answer describes the published rules as they stand on 12 October 2026, checked against the sources listed. Tax and residence rules depend on your own circumstances and change; check your position with a tax adviser qualified in the US and in Cyprus before you act on it.
Ready when you are.
Tell us where you are, where you are going and what the company will do. We reply with your price, in writing, and a time to talk.
