In accordance with the Special Contribution for the Defence of the Republic Law N.117(I) of 2002, Banking Organizations are obliged to deduct special contribution for the defence at the rate of 10% from interest paid or credited to accounts maintained by Cyprus residents.
Persons who are considered «non Cyprus residents» must first of all complete, sign and deliver at the branch of Bank of Cyprus Public Company Ltd, where the accounts are held, the attached «Declaration for Exception from the Deduction of Defence Contribution on Bank Interest Paid or Credited». The said Declaration informs the Bank that customers are not residents in Cyprus so that Special Contribution for the Defence relating to interest on bank accounts will not be deducted.
For your information please find here below who are considered to be Cyprus Residents regarding the above-mentioned law:
- Individuals who reside in Cyprus for one or more periods which exceed in total 183 days during a tax year and
- Legal persons whose management and control is exercised in Cyprus.