The Special Defence Contribution Law was amended with regards to the rate on passive interest income earned by Cypriot tax residents (individuals and companies) reduced from 30% to 17%.

The above amendment is effective as from 1 January 2024.

Active interest income derived from the ordinary carrying on of a business or closely connected with the ordinary carrying on of a business is not considered as passive interest and therefore it does not fall within the provisions of the special contribution for defence law. Such interest income is subject to the provisions of the income tax legislation.