Cyprus Companies’ Deemed Dividend Distribution and General Health System contributions – December 2021 – For Cypriot Shareholders
Cyprus Companies should be aware of the deemed distribution of the Special Contribution for the Defence and the General Health System Contribution on profits and dividends.
In accordance with the Cyprus Tax Law, Cyprus Companies are deemed to have distributed in the form of dividends, 70% of their accounting profits after deducting the Cyprus taxes, from the end of the second year of the year when the profits have been related. Special contribution for the defense at 17% for the tax year 2021 will be payable on such deemed dividends to the extent that the shareholders (companies and individuals) are Cyprus tax residents (Non-Cypriots who have moved their tax domicile to Cyprus are exempt. The amount of deemed distribution is reduced by any actual dividends paid out of the profits of the relevant year at any time. In this respect, profits of the year 2019 are subject to a deemed distribution on 31 December 2021. This special contribution for defense is payable by a Cyprus Company on behalf of its shareholders.
Similarly, Cyprus Companies are subject to contribution to the General Health System which amounts to 2.65%. The contribution to the General Health System is paid by the Cyprus Company on behalf of all Cyprus Company shareholders – European citizens who work or have acquired the right of permanent residence in Cyprus
Cyprus Companies that declare and pay contributions after the due dates, additional fines, and penalties will be imposed.
Portal for payment of contributions
The payment of contributions can be settled through the JCCSmart website or Cyprus Tax Department portal following a similar procedure as the provisional tax payment by following the links below:
How Can We Help
Please contact us to share any questions you have about the above topic
Tel. +357 22 340000
Email: [email protected]
The authors expressly disclaim all and any liability and responsibility to any person, entity, or corporation who acts or fails to act as a consequence of any reliance upon the whole or any part of the contents of this publication.
Accordingly, no person, entity, or corporation should act or rely upon any matter or information as contained or implied within this publication without first obtaining advice from an appropriately qualified professional person or firm of advisors, and ensuring that such advice specifically relates to their particular circumstances.