Cyprus adopts defensive tax measures against EU-blacklisted jurisdictions
On 21 December 2021, amendments to the Income Tax Law and Special Defence Contribution Law were published in the Cyprus Government Gazette (“Law amendments”) for the introduction of legislative defensive tax measures that will apply in Cyprus in relation to jurisdictions included on the EU list of non-cooperative jurisdictions for tax purposes (commonly referred to as “EU blacklisted jurisdictions”).
In accordance with the Law amendments, Cyprus will apply withholding tax (WHT) on certain outbound payments of dividends, interest and royalties, if the recipient is a company in an EU blacklisted jurisdiction, as follows:
- Dividends at the rate of 17%
- Interest at the rate of 30%
- Royalties at the rate of 10%
The Law amendment will enter into force on 31 December 2022.
Please see our alert below for more details.