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An overview by STI Taxand, Taxand Cyprus
Cyprus has introduced sweeping defensive tax measures targeting transactions with low-tax and blacklisted jurisdictions. The reforms include denial of deductions, new withholding taxes on dividends, interest and royalties, mandatory treaty renegotiations, and strict penalties for non-compliance.
Effective from April 2025 for blacklisted jurisdictions and January 2026 for low-tax jurisdictions, the rules aim to curb aggressive tax planning, enforce substance requirements, and align Cyprus with international standards. Businesses with holding, financing and IP structures linked to such jurisdictions must urgently reassess their arrangements to avoid significant tax exposure and penalties.
Christos Theophilou from our Cypriot member firm STI Taxand has published an overview of the new measures which can be read here.
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