REDUCTION OF DEFENCE TAX ON PASSIVE INTEREST INCOME FROM 30% TO 17% BY Nikos Christoforou (Cyprus)

 

 

On behalf of everyone here in Totalserve, we would like to wish you all a Happy New Year-2024

May you stay healthy, busy, and creative!

Getting back to work is always difficult; but it needs to be done.

Please see below a new post we drafted with a very important update regarding the Cyprus Defence tax.

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Reduction of Defence tax on passive interest income from 30% to 17%

The Cyprus Parliament approved on 6 December 2023 an amendment to the Special Defence Contribution (‘SDC’) Law, through which the SDC rate on passive interest income earned by Cypriot tax residents (individuals and companies) is reduced from 30% to 17%.

The amendment was published in the official Cyprus Government Gazette on 20 December 2023 and comes into force on 1 January 2024.

Please be reminded that the SDC rate was increased from 15% to 30% during the year 2013, as part of several temporary economic measures at the time.

The amendment serves to rectify the discrepancy that existed on the taxability of passive interest compared to dividends (which are taxed under SDC at 17%).

This is a positive and welcome development that is expected to contribute to the reduction of the tax burden of Cypriot taxpayers.

For further information please contact Totalserve Group.