SDC on interest income reduced in Cyprus

Effective from 1 January 2024, special defence contribution (SDC) on passive interest income earned by Cyprus tax resident individual and companies is reduced from the rate of 30% to 17%.

It should be noted that active interest income from ordinary business activities or closely related to the ordinary activities is not subject to SDC provisions and it is taxed under the provisions of the income tax law.

Furthermore it is important to mention that Cyprus tax resident individuals who are considered as “non-domiciled” in Cyprus for tax purposes, are completely exempt from SDC on their passive income. For more information on the “non-domiciled” status please see our Information Sheet 67.

PGE&Co remains at your disposal for any clarifications and for further assistance that might be needed on this or on any other matter.