Deduction Of SDC Tax At Source From Rental Payments

With effect from 1 July 2011, companies, partnerships, and national or local government bodies which pay rentals to Cyprus-resident landlords are required to deduct SDC tax from rental payments and remit it to the tax authorities. The amount to be deducted and paid over to the tax authorities is 3% of 75% (i.e. 2.25%) of the gross rental amount.

The tenant must remit the amount deducted to the tax authorities before the end of the month following the month in which the deduction was made using form IR601A. In the event of non-payment or delay in payment penalties and interest may be imposed.

At each 30 June and 31 December the tenant must provide the landlord with a statement of tax withheld on form IR614A REC. Tenants must also submit with their annual tax return a list of the landlords from which SDC was withheld. Persons or companies receiving rents are responsible for ensuring that the amount of SDC withheld and shown on form IR614A REC is correct.