Dividend tax and income from interest
Income from dividends is corporate tax exempt for companies while personal income tax exempt for private persons. However, in certain cases a special tax (SCD) is payable on paying dividends.
Dividend paid for a foreign tax resident company of private individual in Cyprus is tax free.
17% tax is payable on the income from dividends of a private individual – irrespectively of receiving the dividends either from a Cyprian or a non-Cyprian resident company. The special tax payable by private individuals was decreased in 2014 from the previous 20%.
Interests originating from normal business operations belong to the corporate and the personal income taxes. Only special tax (SCD) of 30% (previously 15%) is payable on other income from interest.
Summarisingly:
|
Item |
Tax rate |
|
|
Private person |
Legal person |
|
|
Income from dividend paid by a Cyprian company |
17% |
0% |
|
Income from dividend paid by a foreign company |
17% |
0% (*17%) |
|
Income from interest originating from normal business operations |
0% |
0% |
|
Other income from interest |
30% |
30% |
* If one arrives from a low tax rate (lower than 6.25%) country AND the income of the payer is mostly from investment.
If the annual income of the private individual does not exceed EUR 12000 (including income from interest) in the tax year, tax rate shall be decreased to 3%.