Cyprus Introduces New Defensive Tax Measures Targeting Blacklisted and Low-Tax Jurisdictions

On 10 April 2025, the Cyprus House of Representatives passed significant legislation introducing enhanced defensive tax measures aimed at improving tax transparency and compliance. These measures target blacklisted jurisdictions (BLJ) and low-tax jurisdictions (LTJ).

Effective 16 April 2025, the amended provisions reinforce existing rules for BLJs, maintaining:

• 17% withholding tax (WHT) on dividend and interest payments to associated companies in BLJs;
• 10% WHT on royalty payments to BLJs.

From 1 January 2026, new rules will apply to LTJs, as follows:

• 17% WHT on dividends paid to associated companies in LTJs;
• Non-deductibility of interest and royalty payments to associated companies in LTJs for corporate tax purposes.