Special Defence Contribution for Individuals

Special contribution for defence is a tax imposed on dividends, passive interest and rents earned by Cyprus tax resident companies and tax resident domiciled individuals. Non-resident companies and resident individuals who are not domiciled in Cyprus are exempt. For the Cypriot Non-Dom regime, please see visit our dedicated page.

Type of incomeIndividuals
Dividend income from Cyprus resident companies17%
Dividend income from non-Cyprus resident companies17%
Active Interest (interest arising from the ordinary activities or closely related to the ordinary activities)Exempt (1)
Passive Interest (other than active interest, such as interest from bonds or bank deposits)17% (2)
Rental income (reduced by 25%)3%


  1. Active interest is subject to Income Tax / Corporation Tax.
  2. With effect as of 1 January 2024, the SDC rate on interest income has been reduced from 30% to 17%. Also, interest income earned by individuals from Cyprus government savings bonds and development bonds is subject to SDC at the rate 3% (instead of 17%). Also, in the case where the total income of an individual (including interest) does not exceed €12.000 in a tax year, then the rate on interest income is reduced to 3% (instead of 17%).


Please note that the information provided here is for general guidance only and does not constitute professional tax advice. Tax laws and interpretations are subject to change, and individual circumstances can significantly affect tax obligations and benefits.

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For personalized tax advice tailored to your specific situation, we strongly recommend consulting with a qualified tax professional. Our team is equipped with the expertise to navigate the intricacies of Cyprus tax law and provide you with customized solutions. Contact us to ensure that you are making the most informed decisions for your tax-related matters.

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