Deemed Dividend Distribution for the tax year 2019
We would like to remind you of the deemed dividend distribution (DDD) provisions of the Special Contribution for the Defence Law that relate to the tax year 2019.
Profits subject to deemed dividend distribution
Companies are deemed to have distributed to their resident shareholders 70% of their accounting profits, after taxes and certain adjustments, as at the end of two years from the end of the year to which the profits relate to. Any actual dividends paid out of such profits, either during the relevant tax year in the form of interim dividends or within the two years’ period after the year end reduce the profits subject to the deemed distribution rules.
The DDD provisions apply to the profits of Cypriot tax resident companies that are attributable directly to Cypriot tax residents and domiciled shareholders (i.e. the proportion of profits attributable directly or indirectly to non-Cypriot tax resident and domiciled shareholders are exempt from the DDD provisions).