Cyprus Publishes A List of Low-Tax Jurisdictions for 2026

On April 9, the Cypriot Tax Department issued Circular 1/2026 listing the jurisdictions considered as low-tax jurisdictions (LTJs) for the purposes of applying the relevant defensive tax measures against low-tax jurisdictions (i.e., dividend withholding tax and nondeductibility of interest/royalties), applicable as of  January 1, 2026.

The 2026 list includes the following jurisdictions:

Anguilla

Bahamas

Bahrain

Bermuda

British Virgin Islands

Cayman Islands

Guernsey

Isle of Man

Jersey

Turks and Caicos Islands

Vanuatu

According to Article 11(17) of the Cyprus Income Tax Law and Article Article 3(1)(d)(i)(aa)  of the Special Contribution for the Defense Law, LTJs are subject to the following requirements:

a) Interest and royalty payments to in-scope recipients that are tax residents and/or organized and/or established in low-tax jurisdictions shall not be allowed as deductions from the payer’s taxable income; and

b) Dividend payments to in-scope recipients shall be subject to a withholding tax of 5%.

Circular 1/2026