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Withholding taxes (“WHT”) on dividends
In SCDL a WHT at the rate of 17% is introduced, that applies on dividends paid by a Cyprus tax resident company to companies which are:
· resident in EU blacklisted jurisdictions
· incorporated/registered in EU blacklisted jurisdictions and are not tax resident in any other jurisdiction that is not included in the EU Blacklist
The above is subject to the following conditions:
· the WHT is not applicable if the dividends are paid on listed shares of a recognized stock exchange
· the direct recipient holds directly or jointly with associated companies, more than 50% of the capital, voting rights or entitlement to profit in the Cyprus company paying the dividends
· the abovementioned associated companies are resident/incorporated/registered in EU blacklisted jurisdictions and are not tax resident in any other jurisdiction that is not included in the EU Blacklist
.WHT on interest
In SCDL a WHT at the rate of 30% is introduced, that applies on interest paid by a Cyprus tax resident company to companies which are:
· resident in EU blacklisted jurisdictions
· incorporated/registered in EU blacklisted jurisdictions and are not tax resident in any other jurisdiction that is not included in the EU Blacklist
The above is subject to the following conditions:
· the WHT is not applicable if the interest is paid on listed securities of a recognized stock exchange
· the interest is paid by an individual
WHT on royalties
In ITL a WHT at the rate of 10% is introduced, that applies on royalties paid by a Cyprus tax resident company to companies which are:
· resident in EU blacklisted jurisdictions
· incorporated/registered in EU blacklisted jurisdictions and are not tax resident in any other jurisdiction that is not included in the EU Blacklist
The above is not applicable to royalties paid by an individual.
Additional Cyprus corporate tax residency test
An addition in ITL, stating that Companies that are incorporated/registered in Cyprus and are managed and controlled outside Cyprus, will be considered as tax residents of Cyprus on the condition that they are not tax residents of any other jurisdiction.
