DIVIDEND INCOME

 

Dividends paid from one Cyprus Company to another are free from withholding or any other tax in Cyprus.

 

Dividends Received from Abroad

There is no withholding tax dividends received from other Cyprus resident companies.

 

Dividends received from abroad are also tax exempt if the following two conditions apply:

1. The Company receiving the dividend must hold directly at least one percent (1%) of the share capital of the company abroad paying the dividend, and

2. The Company paying the Dividend:

    - must not engage more than fifty percent in activities which lead to passive income (non-trading) income OR

    - the foreign tax burden or the income of the company paying the dividend is not substantially lower than  the tax burden in Cyprus.

(a tax rate of 6,25% or more in the country paying the dividend satisfies this condition).