Special Defence Contribution on dividends

Since the tax reform, the Special Defence Contribution on dividends for Cyprus tax residents is 5%.

Dividends from older profits still pay the old rate. Choose which profits the dividend comes from.

How it's calculated

Special Defence Contribution: 5% of the dividend, or 17% for dividends from profits up to 2025 paid within six years of the amendment.
GeSY: 2.65% of the dividend.
Dividends don't pay income tax on the bands.

A €10,000 dividend from 2026 profits pays €500 defence contribution and €265 GeSY. You keep €9,235.

Who pays the defence contribution?

Individuals who are Cyprus tax residents. The law has special rules for companies and for dividends passed through other companies.

Are dividends subject to income tax?

No. The income tax law exempts dividend income. The defence contribution and GeSY apply instead.

Does deemed dividend distribution still apply?

Only for profits up to tax year 2025. Dividends already deemed distributed are deducted from dividends paid later.

Tax resident: Someone who spends more than 183 days a year in Cyprus or meets the 60-day rule.

Up-to-date official data

Data checked against the official source on 26 October 2026.

We check the official sources automatically, every day.