The transitional window under Article 143(3) of Regulation (EU) 2023/1114 (MiCA) expired on 1 July 2026. That provision had permitted CASPs lawfully operating before 30 December 2024 under Cyprus's prior national framework to continue providing services until 1 July 2026 or until their MiCA authorisation application was decided by the Cyprus Securities and Exchange Commission (CySEC), whichever occurred first. Separately, the Cyprus legislature introduced Article 20E into the Income Tax Law as part of the 2026 tax reform, effective 1 January 2026, imposing a flat 8% tax on net gains from crypto-asset disposals.
Article 143(3) of MiCA provided the grandfathering mechanism allowing national arrangements to govern defined categories of firms temporarily. Upon expiry, all CASPs providing services in Cyprus must hold a full MiCA authorisation under Title V of MiCA, satisfying its capital adequacy, organisational governance, custody, and prudential requirements. Article 20E of the Income Tax Law establishes the 8% flat-rate charge on net gains from disposal of crypto-assets as defined under MiCA, applicable to individuals and entities within Cyprus's tax jurisdiction under the standard self-assessment reporting regime.
CASPs that had not secured a MiCA authorisation or a CySEC-acknowledged pending application before 1 July 2026 must cease providing regulated crypto-asset services to clients in Cyprus. CASPs authorised in other EU Member States may passport their MiCA authorisation into Cyprus through notification to CySEC under Article 60 of MiCA, provided the passport covers the specific services offered to Cypriot clients. Individuals and corporate entities disposing of crypto-assets in Cyprus from 1 January 2026 onward face the 8% flat tax and must report gains under the Cyprus self-assessment mechanism.
CASPs with pending MiCA applications formally acknowledged by CySEC before 1 July 2026 may have been permitted to continue operating while their applications were under review; firms in this position should confirm their status with CySEC directly. Disposals of crypto-assets before 1 January 2026 fall under the prior tax regime, and the applicable treatment should be verified with Cyprus tax counsel. The MiCA passporting regime allows a CASP authorised in any Member State to serve Cypriot clients without a separate Cyprus authorisation, provided the service types and notification procedures are completed correctly.
Licentium advises on MiCA authorisation strategy, CASP regulatory compliance across EU jurisdictions, and crypto-asset tax structuring in coordination with specialist tax counsel. We have a partner network capable of providing Cyprus-specific regulatory and tax advice. Work we undertake includes MiCA licensing applications, CASP governance and capital structuring, cross-border passporting analysis, and crypto-asset disposal tax planning.