- Dividends are exempt from corporation tax
- Dividends received by a company are not subject to Special Defence Contribution (SDC) unless:
The non-resident company paying the dividend engages directly of indirectly by more than 50% in activities that lead to investment income and the overseas tax burden on its income is significantly lower than the Cyprus tax burden (less than 6,25%) or
– Dividends were not deductible from the taxable income of the dividends paying company
The dividends paid by a resident company to another resident company are exempt from SDC.
When the company pays dividends is obliged to give to its shareholders a certificate stating the following:
- The amount of the dividends paid to the shareholder and
- The special defence contribution that was held by the company in respect of the dividends paid (if applicable).