In accordance with the General Healthcare System Law of 2001 (Law 89(I)/2001, a amended), as from 01/03/2019, any Bank in Cyprus (as well as other persons defined in the relevant Legislation) is obliged to withhold the related GHS contributions from the interest, dividents and rents that are paid to Physical Persons who are considered Cyprus Tax Residents. It is noted that Bank of Cyprus is also obliged to withhold the GHS contribution in the case that rent is paid to Physical Persons who are not considered as Cyprus Tax Residents. The term Cyprus Tax Resident as well as the term non-Cyprus Tax Resident are interpreted in accordance with the Income Tax Law of 2002 (N118 (I)/2002).
The above contributions will be calculated by applying the rate of 1,70% on the gross amount of dividends, interest and rents, this percentage will increase to 2,65% as from 01/03/2020. Furthermore, the contribution withheld will be remitted by the Bank of Cyprus to the Commissioner of Taxation. It is noted that any contribution to be withheld is considered as a contribution imposed to the Physical Person from which it is required and may be recovered by such a person under conditions.
In cases where the GHS contribution withheld is disputed, customers should contact any Branch of Bank of Cyprus for verification of their tax residency status and return of any contribution that may have wrongly been withheld.
GHS contributions withheld will be described on the Bank Statements issued to customers as General Healthcare System (“GHS”).
The present does not constitute tax or other advice, it is provided only for information purposes.