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Interest on Money

Posted: 01 May 2009 06:33
by bitterlemons
Nigel, I used to understand this and now have become confused after chatting to too many people! If money I have invested in UK Bldg Soc will produce, say for example GB£1,000 interest, do I have to pay GB£100 to CY Gov for defence if I am registered for tax in CY? I cannot include it in my normal tax rate of 5 percent?
Thanks for your patience

Re: Interest on Money

Posted: 01 May 2009 11:17
by Nigel Howarth
Hi bitterlemons,

This is the Cyprus Defence Levy, which is taxed as follows:

Dividends from Cypriot companies - 15%
Dividends from foreign companies - 15%
Other Interest from bank, building societies, etc - 10%

The standard rate is 10%. But if your total income is less than €11,970 the rate is reduced to 3%. If you have an interesting earning account in Cyprus, the 10% Defence Levy is automatically deducted from your account - but you can apply for a refund.

If you have already paid tax on the interest in the UK, that will be deducted from your Defence Tax liability.