Amendment of the Special Defence Contribution law - Expansion of application of 3% reduced rate
Updated: Aug 20, 2022
The Cyprus Parliament passed amendments to the Special Defence Contribution ("SDC") law on May 26, 2022, with the goal of expanding the application of the reduced SDC rate of 3%. On June 8, 2022, the amending SDC law was published in the Gazette and became effective on that date.
The reduced rate of 3% applied to interest income received by Cyprus tax resident domiciled individuals from savings certificates and development bonds of the Republic of Cyprus, corporate bonds, and interest received or credited by a Provident Fund or the Social Insurance Fund under the old provisions of the law [Article 3(2c)].
The 3% rate will now apply to both Cyprus tax resident domiciled individuals and Cyprus tax resident legal entities on interest received from savings certificates and development bonds issued by the Republic of Cyprus or any other State, corporate bonds listed on a recognized Stock Exchange, as well as interest received or credited by a Pension Fund, a Local Authority, a Public entity or a Semi-Governmental Organization, a Provident Fund or a Provident Fund.
Interest income derived from the ordinary carrying on of a business or closely connected with the ordinary carrying on of a business is not considered interest and thus does not fall under the provisions of the SDC law, according to the amending law.
How we can assist you
Our team of experts are ready to assist you discuss the aforementioned amendments.
*DISCLAIMER: This article and its publication are intended to provide a brief introduction and act as a general guide. This is provided for information purposes only and cannot be utilized as a substitute for professional advice. This document does not represent a legal opinion and one must not rely on it without receiving independent advice based on the particular facts of its own case. No responsibility is accepted by the author or the publishers for any loss suffered from acting or refraining from acting based on the contents of this publication.
Start a conversation with us today to find out how you can benefit from a relationship with Flexi Group.
Please get in contact with our Head of Business Development:
Mrs Daniella May / Head of Business Development
Tel.: + 357 7000 2 5555 / + 357 22 87 57 55
We also organize calls using Skype. Our flexi Skype ID is email@example.com