The North Cyprus tax amnesty 2026 is in force. Decree-Law 81/2026 waives up to 90% of penalties, surcharges and late-payment interest on tax debts for the 2024 and earlier taxation periods. The application deadline is 12 October 2026.
What is Decree-Law 81/2026 and when did it take effect?
The full title is the "Decree-Law on Accelerating the Collection of Taxes Relating to the 2024 and Earlier Taxation Periods and of Local Authority Receivables". Made by the Council of Ministers under Article 112 of the TRNC Constitution, it was published in Official Gazette No. 138 of 23 July 2026, Annex I Part II, and entered into force on that date (Article 12). Its stated purpose is to give relief to taxpayers in economic difficulty and accelerate collection (Article 3); it is administered by the Ministry responsible for Finance (Article 11).
Which taxes and which periods are covered?
The decree covers taxes, tax penalties and special irregularity fines for the 2024 and earlier taxation periods under seven laws (Article 4), plus principal receivables of Local Authorities — excluding the Union of Turkish Cypriot Municipalities — for periods up to and including 31 December 2024, with the related surcharges and interest. Only penalties, surcharges and interest are waived; the principal debt is not reduced.
- Income Tax Law (Gelir Vergisi Yasası)
- Corporate Tax Law (Kurumlar Vergisi Yasası)
- Banking and Insurance Transactions Tax Law (Banka ve Sigorta İşlemleri Vergisi Yasası)
- Value Added Tax Law (Katma Değer Vergisi Yasası)
- Immovable Property Tax Law (Taşınmaz Mal Vergisi Yasası)
- Law on the Taxation of Undeclared Income and Transferred Property of Deceased Persons
- Tax Procedure Law (Vergi Usul Yasası)
How do you apply, and by when?
Application is mandatory and must be made by close of business on 12 October 2026, using the declarations and/or forms prescribed by the Tax Office (Article 5(1)). Relief is not automatic. Local Authorities opt in by resolution of their own councils, so treatment of municipal arrears may differ between municipalities. Taxpayers choosing instalments must pay 20% of the total calculated debt before close of business on the day of application (Article 5(2)).
What are the waiver rates?
| Payment route | 2023 and earlier periods | 2024 period |
|---|---|---|
| Lump sum (Article 6(1)) — entire principal paid before close of business on the application day | 90% of penalties and 90% of late-payment surcharges and interest | 50% of penalties and 50% of late-payment surcharges and interest |
| Instalments (Article 6(2)) — 20% of the total debt on the application day, principal in 6 (six) equal monthly instalments | 80% of penalties and 80% of late-payment surcharges and interest | 40% of penalties and 40% of late-payment surcharges and interest |
Source: Official Gazette No. 138 (23 July 2026), Decree-Law 81/2026, Article 6.
The 2024 period column covers 2024 taxation-period receivables and public receivables falling due between 1 January and 31 December 2024, inclusive. In all four scenarios, all penalty-linked surcharges are waived on top of the rates shown. On the instalment route, the balance after the 20% payment is settled in 6 (six) equal monthly instalments from the month following the application period, each due by the fifth day of the month — on the wording of the text, November 2026 to April 2027.
Who can benefit, and what is excluded?
Any taxpayer with qualifying arrears — individuals, companies and other legal entities — may benefit if they apply in time. Excluded are debts for the 2025 and later periods, Local Authority receivables arising after 31 December 2024, receivables of the Union of Turkish Cypriot Municipalities, and in every case the principal itself. This is a reduction of penalty and interest cost, not a debt write-off.
What this means in practice
The gap between the lump-sum and instalment routes is ten percentage points: 90% against 80% for 2023 and earlier periods, and 50% against 40% for 2024. Under Article 7, amounts paid under the decree cannot be deducted as an expense in any taxation period, offset against taxes payable, or claimed as a refund — a restriction that applies to all other public receivables paid under it as well. The real cash cost is therefore higher than the headline rates suggest, because the payment does not reduce the taxable base.
What happens if payments are missed?
Amounts not paid on time are collected under the Law on the Procedure for the Collection of Public Receivables (Article 9(1)). If the calculated or instalment amounts are not paid in full, the debt reverts to its principal and amounts already paid are offset proportionally (Article 9(2)). The benefit is lost where a taxpayer (A) fails to pay all accrued amounts within the set periods, (B) fails to act within the prescribed application or declaration periods, or (C) accepts the Tax Office's treatment and then refuses to implement it (Article 9(3)). Amounts already collected are then neither refunded nor offset against other taxes or years.
What should you do now?
Steps for businesses under Decree-Law 81/2026: (1) obtain a current statement of arrears from the Tax Office, separating principal from penalties and surcharges/interest; (2) split the balances between 2023 and earlier and 2024, since the waiver rates differ; (3) compare the cash cost of both routes, factoring in the Article 7 restriction on deduction and offset; (4) have the day-of-application payment ready — the full principal, or 20% of the total on the instalment route; (5) if you have municipal arrears, confirm whether the relevant council has passed a resolution. All steps must be completed by close of business on 12 October 2026. Allow several weeks for reconciliation rather than leaving it to the final day.
Points the decree does not settle
The explanatory note to Article 5 refers to debts excluded from the scheme, but the published text of Article 5 contains no exclusion list. Article 9(2) refers to non-payment "within the period the decree is in force", while Article 12 sets only the entry-into-force date and no expiry date is specified. Whether the forms required under Article 5(1) have been issued cannot be determined from the text, so current Tax Office guidance should be confirmed before applying.
To discuss your arrears under this decree, please contact N.Akman & Co. — you are welcome at our office.
