Reduction of Special Defence Contribution rate on interest 

As from 1 January 2024, the tax rate for the Special Defence Contribution on interest income has been lowered from 30% to 17%. This change applies to both individuals and companies tax resident in Cyprus.

The recent decrease in the tax rate on interest income could lead to a boost in savings and investments within the country.  Given that banks in Cyprus have not raised interest rates on deposits, this move by the government essentially encourages savings. This policy could be seen as a strategic effort to enhance the country’s economic stability and growth by promoting domestic savings.

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