Contributed by Yiallourides & Partners Ltd, Cyprus
We kindly remind you that under the provisions of the Income Tax Law, every Company resident in the Republic is deemed to have distributed 70% of its profits after taxation (as adjusted for DDD purposes) in the form of dividends within two years from the end of the tax year in which such profits were generated. The amount of deemed distribution is reduced by any actual dividends paid out of the profits of the relevant year at any time.
SDC – Special defense contribution is imposed to the extent that the ultimate direct/indirect shareholders of the company are Cyprus tax resident and domiciled individuals at the rate of 17%.
GHS – General healthcare system contribution is imposed to the extent that the ultimate direct/indirect shareholders of the company are Cyprus tax resident individuals at the rate of 2.65% (gross emoluments earned by individuals subject to GHS are capped to EUR 180,000 per annum).
Both SDC and GHS on deemed dividend distribution for profits generated in the year 2019 are payable by the company for the account of the shareholders by 31/01/2022.
Late payment of the SDC and GHS due will be subject to interest at the current rate of 1.75% per annum and to a 5% penalty on the tax due. An additional penalty of 5% on the tax due may be imposed if the tax remains unpaid two months after the above due dates.
We are at your disosal to assist you with the calculations, the administration of the payment and the submission of the relevant declarations.