Does Cyprus withhold tax on dividends paid abroad?

Not in the general case. There is no Special Defence Contribution on dividends paid to non-resident shareholders.

What are the two exceptions?

5% where the recipient is a non-resident company resident in a low-tax jurisdiction holding more than 50% alone or with connected persons, or otherwise associated; and 17% where that company sits in an EU non-cooperative jurisdiction.

What about interest and royalties?

0% to non-residents generally, 10% on royalties for rights used in Cyprus, and 17% on interest or 10% on royalties paid to blacklist jurisdictions.

Cyprus dividend tax for non residents: nil, with two exceptions

Why Cyprus works as a holding jurisdiction, and the two shareholders it does not work for.

Last verified 2026-10-22Next review 2027-01-222 official sources

Whether Cyprus works for you depends on how you earnTalk it through

Cyprus dividend tax for non residents, an aircraft wing above a coastline

Cyprus dividend tax for non residents is nil in the ordinary case, and that single fact is most of why Cyprus companies end up in holding structures. The two exceptions that exist are aimed at low-tax and blacklisted jurisdictions, not at ordinary shareholders.

Cyprus dividend tax for non residents: the rule

Who receives the dividend	Rate
Non-resident shareholder, general case	0%
Non-resident company in a low-tax jurisdiction holding more than 50%, alone or with connected persons, or otherwise associated	5%
That company, where it is in an EU non-cooperative jurisdiction	17%

The 5% and 17% charges do not apply to listed securities where the payer cannot know the recipient is associated. The general anti-abuse rule applies on top of all of it.

Interest and royalties follow the same shape

Nothing to non-residents generally. 10% on royalties for rights used in Cyprus. 17% on interest and 10% on royalties where the recipient is in a blacklist jurisdiction. So the pattern across all three is: open by default, closed to the places the EU list names.

What this does not tell you

It tells you what Cyprus takes. It says nothing about what your own country does with the dividend when it arrives, which is decided by its law and by the treaty with Cyprus. Cyprus has treaties with around 67 jurisdictions, some of them signed and not yet in force.

That is the question worth asking before building anything. A nil Cyprus withholding is worth little if the receiving country taxes the dividend at 30% on arrival.

The resident comparison

A Cyprus tax resident receiving the same dividend pays no income tax under section 8(20), then the defence contribution only if domiciled here, at 5% from 2026, and the health contribution at 2.65% capped at EUR 180,000 of income. A non-dom resident therefore lands close to a non-resident, which is the whole design of the regime.

Where they differ is the health contribution: a non-resident reportedly pays none on dividends or interest, and we have that from a secondary summary rather than from the Health Insurance Organisation directly.

The withholding rules as enacted are in Law 245(I)/2025, section 3.

Common questions

Does Cyprus withhold tax on dividends paid abroad?: Not in the general case. There is no Special Defence Contribution on dividends paid to non-resident shareholders.
What are the two exceptions?: 5% where the recipient is a non-resident company resident in a low-tax jurisdiction holding more than 50% alone or with connected persons, or otherwise associated; and 17% where that company sits in an EU non-cooperative jurisdiction.
What about interest and royalties?: 0% to non-residents generally, 10% on royalties for rights used in Cyprus, and 17% on interest or 10% on royalties paid to blacklist jurisdictions.

Whether Cyprus works for you depends on how you earn

Where you live is only half of it. We can walk through your position with you, including the cases where Cyprus tax residency does not give the result people expect. This is general information, not tax advice for your circumstances.

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Sources

Every legal, fee and procedural statement on this page is taken from the sources below and was checked on 2026-10-22. Where they change, this page changes.

Law 245(I)/2025 amending the Special Contribution for the Defence Law (cylaw.org) — Deemed domicile after 17 of 20 years, dividend SDC rates and the EUR 250,000 lump-sum option
PwC Worldwide Tax Summaries: Cyprus corporate withholding taxes (reviewed 4 August 2026) — Withholding rates on dividends, interest and royalties, and the treaty network (secondary source)

This page is general information about Cyprus rules as published by the authorities named above. It is not legal or tax advice for your circumstances, and immigration outcomes depend on your nationality, documents and individual case. See our legal and tax information disclaimer.