Extraordinary Contribution for the Defence of the Republic (amending) Law of 2022 (‘SDC Amending Law’) in effect from 8 June 2022.

The SDC Amending Law which was passed by the House of Representatives has now been published in the Official Gazette. Its changes apply to natural or legal persons resident in the Republic of Cyprus.

The SDC Amending Law introduces a reduced contribution rate of 3% in the instances where interest is received or credited from the following:

  1. Government issued saving certificates and development bonds;
  2. Corporate securities listed on a recognised stock exchange, and
  3. Local government authority or government agency issued bonds or securities listed on a recognised stock exchange.

It also applies the reduced 3% contribution rate to interest received by or credited to local authorities, government agencies, pension funds, provident funds and the Social Security Fund.

Finally, it clarifies that interest received in the normal course of business, or closely linked to the normal course of business, is not subject to SDC contributions.

For assistance with organising your tax affairs please contact the Elias Neocleous & Co LLC Advanced Tax Planning and Business Structuring Team.