A company resident in Cyprus has to pay 17% special contribution to the defence fund based on a deemed distribution of 70% of the accounting profits after taxation and before set-off of losses brought forward from previous years, after taking into consideration any dividends paid within the two years. The deemed distribution takes place two years after the end of the year of assessment.
This deemed distribution applies only when the shareholders of the company are tax residents of Cyprus and Cyprus domiciled individuals. (Non – Resident/Domiciled Beneficial Shareholders are exempt).
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