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.