On 26 May 2022, the House of Representatives passed amendment to SDC Law which is effective as of 8 June 2022, the date of its publication in the Official Gazette of the Republic of Cyprus.
The amendment refers to the imposition of reduced rate of 3% for natural or legal persons resident in the Republic of Cyprus that receive or credited with interest from:
● Saving certificates and development bonds issued by the Republic of Cyprus,
● Corporate bonds listed on a recognised stock exchange, and
● Bonds or debentures issued by a local authority or a government organisation, which are listed on a recognised stock exchange.
Furthermore, the reduced 3% SDC rate applies to interest received or credited by any local authority, government organisation, pension fund, provident fund and to the social insurance fund.
It is noted in the amending law that interest income received as part of the taxpayer’s ordinary course of business or that it is closely connected with such ordinary course of business, is not treated as interest income for SDC purposes.
Taxcom can assist you to apply the correct tax treatment of the interest income received or credited by a Cyprus company or individual.
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