Effective 1 January 2026, the Cyprus Tax Department issued Circular No. 1/2026 (dated 9 April 2026), establishing the official list of Low-Tax Jurisdictions (LTJs) under the country’s amended tax framework.
The 2026 Low-Tax Jurisdiction List:
- Anguilla
- Bahamas
- Bahrain
- Bermuda
- British Virgin Islands
- Cayman Islands
- Guernsey
- Isle of Man
- Jersey
- Turks and Caicos Islands
- Vanuatu
Dividends paid by Cyprus companies to related entities resident or incorporated in listed LTJs are subject to a 5% Special Defence Contribution (SDC) withholding tax. This represents a reduction from the 17% rate applicable to EU-blacklisted non-cooperative jurisdictions.
Additionally, interest and royalty payments to LTJ recipients are non-deductible for Cyprus corporate income tax purposes.