Amendments to the Cyprus tax legislation for the prevention of tax abuse

  1. Home /
    2. Newsletters /
  2. Amendments to the Cyprus tax legislation for the prevention of tax abuse
Amendments to the Cyprus tax legislation for the prevention of tax abuse
Newsletters

Amendments to the Cyprus tax legislation for the prevention of tax abuse

Sharing is caring!

On 21 December 2021, certain amendments were published in the Official Gazette (SDC amendments here and ITL amendments here) which refer to withholding tax (WHT) payments by Cyprus tax resident companies to companies which are:

  • Resident in EU non-cooperative (blacklisted) jurisdictions (the EU blacklist can be found here), or
  • Incorporated/registered in a jurisdiction included in the EU blacklist and are not tax resident in any other jurisdiction that is not included in the EU blacklist.

These amendments, which are further analysed below are effective as from 31 December 2022.

WHT on dividends

A WHT at the rate of 17% applies on dividends paid by a Cyprus tax resident company to the above-mentioned foreign companies with the following conditions:

  • The company receiving the dividend holds directly, either on its own or jointly with other associated companies (which are residents in an EU blacklisted jurisdiction or incorporated/registered in an EU blacklisted jurisdiction and not tax resident in any other jurisdiction not included in the EU blacklist), over 50% of the capital or voting rights of or is entitled to receive more than 50% of the profits, of the Cyprus tax resident company paying the dividends;
  • The WHT is not applicable in case the dividends are paid on shares listed on a recognized stock exchange.

WHT on interest

A WHT at the rate of 30% applies on interest paid by a Cyprus tax resident company to the above-mentioned foreign companies with the following conditions:

  • The WHT is not applicable if the interest is paid on securities listed on a recognised stock exchange;
  • The WHT is not applicable if the interest is paid by an individual (physical person).

WHT on royalties

A WHT at the rate of 10% applies on royalties paid by a Cyprus tax resident company to the above-mentioned foreign companies, except for royalties paid by an individual (physical person).

How we can help

We stand ready to clarify any queries you may have and provide any assistance that you may require.