Cyprus: Reduced rate of 3% tax on interest from certain savings certificates and bonds

Amendments to special defense contribution levy

Certain savings certificates and bonds

Amendments to a special defense contribution levy, published in the official gazette on 8 June 2022, concern taxpayers subject to the reduced rate of 3% tax on interest accrued from savings certificates and bonds issued by the Cypriot government as well as from certain corporate bonds.

Previously, individual residents of Cyprus were eligible for the reduced tax rate of 3% on interest received or credited from corporate bonds, savings certificates and development stocks of the Republic of Cyprus, as well as interest received or credited by a provident fund or the social insurance fund. Before the amendments, the reduced rate of tax was not available for companies, corporate bodies or other types of retirement funds.

With the amendments, effective from 8 June 2022, both individuals and the eligible companies can benefit from the reduced rate of 3% on interest income received or credited from government savings certificates and development bonds and interest from corporate bonds of listed entities, provided that the interest does not accrue from the ordinary conduct of their business activity.

Read a June 2022 report prepared by the KPMG member firm in Cyprus 

 

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