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PKF Cyprus

A member of PKF International. A global family of legally independent firms.

Cyprus Companies’ Deemed Dividend Distribution and General Health System contributions – December 2019 – For Cypriot Shareholders

Cyprus Companies should be aware of the deemed distribution of the Special Contribution for the Defence and the General Health Plan Contribution on profits and dividends.

In accordance with the Cyprus Tax Law, Cyprus Companies are deemed to have distributed in the form of dividends, 70% of their accounting profits after deducting the Cyprus taxes, from the end of the second year of the year when the profits have been related. Special contribution for the defence at 17% for the tax year 2019 will be payable on such deemed dividends to the extent that the shareholders (companies and individuals) are Cyprus tax residents (Non-Cypriots who have moved their tax domicile to Cyprus are exempt). The amount of deemed distribution is reduced by any actual dividends paid out of the profits of the relevant year at any time. In this respect, profits of the year 2017 are subject to a deemed distribution on 31 December 2019. This special contribution for defence is payable by a Cyprus Company on behalf of its shareholders.

Similarly, Cyprus Companies are subject to contribution to the General Health Plan which amounts to 1.70% – Phase 1 covering only outpatient care increased to 2.65% – Phase 2 covering both outpatient and inpatient care. The contribution to the General Health Plan is paid by the Cyprus Company on behalf of all  Cyprus Company shareholders – European citizens who work or have acquired the right of permanent residence in Cyprus.

Cyprus Companies which declare and pay contributions after the due dates, additional fines and penalties will be imposed.

Portal for payment of contributions

The payment of contributions can be settled through the JCCSmart website following a similar procedure as the provisional tax payment by following the link below:

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Please contact us if you need any assistance in calculating your payment contributions

Email: [email protected]
Telephone + 357 22 462727


The authors expressly disclaim all and any liability and responsibility to any person, entity or corporation who acts or fails to act as a consequence of any reliance upon the whole or any part of the contents of this document. Accordingly no person, entity or corporation should act or rely upon any matter or information as contained or implied within this publication without first obtaining advice from an appropriately qualified professional person or firm of advisors

PKF / ATCO Limited is a member firm of the PKF International Limited network of legally independent firms and does not accept any responsibility or liability for the actions or inactions on the part of any other individual member firm or firms. This publication is for information purposes only and should not be considered as professional advice