Amendment to the Special Defence Contribution Law

Special Contribution for Defence (SDC) is dictated on income earned by Cyprus tax residents.

On 9 June 2023, amendments to the Special Contribution for the Defence Law were published in the Cyprus Government Gazette amending the obligation to pay the SDC withheld on rents in two semi-annual installments instead of monthly payments.

Every person who is obliged to pay special contribution for defence on rental payments should pay in 2 instalments – until 30th of June and until 31st of December of each year.

Non-tax residents are exempt from SDC. We would like to remind that for individuals SDC is charged as the below:

  • Dividend income from Cyprus resident companies – 17%,
  • Dividend income from non-Cyprus resident companies – 17%,
  • Rental income – 3%,
  • Interest earned as a result of the carrying on of a business activity– 30%,
  • Interest received from Development bonds, Corporate stocks, etc – 3%.

There will be 2,25% interest imposed on payments not paid within the month following the deadlines of each year. The SDC Law provides for a penalty 5% on the due tax in cases that the taxes where not timely paid.

IBCCS TAX – we are at your disposal

Please do not hesitate to contact us if you need additional information. We are here to assist you and find the best solution.

For further enquiries, please contact us by email on info@ibccs.tax or call our office in Cyprus on +357 222 58 777.