On 8 June 2022 it was published in the Official Gazette of the Republic that the Special Defence Contribution Law (the ‘’Law’’) will be amended to expand the application of the 3% reduced rate on interest income received from certain sources such as:
1. Interest from savings certificates and development bonds of the Republic of Cyprus;
2. Corporate bonds listed on a recognized Stock Exchange, and bonds that are listed on a recognized Stock Exchange and were issued by a Governmental Authority or Organization;
3. Interest received or credited by a Pension fund, a Governmental Authority or Organization, a Provident fund or the Social Insurance Fund;
The amended provisions described above will now apply to both individuals and legal entities.
It should be noted that any interest income obtained from the ordinary carrying on of a business is not treated as interest subject to Special Defence Contribution (SDC), but is subject to income tax, and therefore it does not fall within the provisions of the Law discussed above.
The above has entered into force on the same date.
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