Deemed Dividends distribution rule for Cyprus companies

Deemed Dividends distribution rule for Cyprus companies

Deadline for Document Submission: January 31, 2025

We remind you that Cypriot companies that are tax residents in Cyprus and have accounting profits for the 2022 tax year are subject to the Deemed Dividend Distribution (DDD) rules and required to distribute at least 70% of their accounting profits for 2022 by December 31, 2024.

If necessary, they shall pay the Special Defence Contribution (SDC) at a rate of 17% and the General Healthcare System (GHS) contribution at a rate of 2.65% by January 31, 2025.

If the aforementioned 70% of profit is not distributed by December 31, 2024, such amount will be considered by Cyprus tax authorities as deemed dividends, and subsequently the corresponding SDC and GHS contributions shall be paid by January 31, 2025.

Who is subject to the deemed dividend distribution rule?

The DDD provisions apply to the profits of Cypriot companies attributable to shareholders who are Cyprus domiciled tax residents.

The DDD does not apply to the profit attributable to shareholders who have a special tax status of non domiciled tax residents in Cyprus.

If you require additional information on this matter, please contact our experts at contact@mainpartnertrust.com

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