GESY on dividends in Cyprus is 2.65% of the gross dividend amount, withheld by the company before payment to the shareholder. For non-domiciled tax residents, this is the only deduction from dividends — no income tax, no SDC. The annual GESY cap is €200,000 per income source per year, meaning a shareholder receiving up to €200,000 in dividends from one company pays maximum €5,300 GESY. Non-residents pay nothing.
GESY on dividends in Cyprus is 2.65% for the recipient shareholder, capped at a contribution base of €180,000 per year — meaning the maximum GESY on any dividend amount is €4,770 annually.
How GESY on Dividends Works
When a Cyprus company declares a dividend, it is legally required to withhold GESY from the gross amount before transferring the net to the shareholder. The company then declares this via TD603 on TAXISnet and remits the GESY to the Tax Department within 30 days.
The shareholder never pays GESY directly — it is deducted at source by the company, similar to how income tax is withheld in PAYE systems.
The GESY Rate and Cap
| Parameter | Value |
|---|---|
| GESY rate on dividends | 2.65% |
| Annual cap per income source | €200,000 |
| Maximum GESY on dividends (one company) | €5,300/year |
| SDC for non-domiciled shareholders | 0% (exempt) |
| SDC for domiciled shareholders | 5% (since January 2026) |
The €200,000 cap is per source. If a shareholder receives dividends from two different companies, the cap applies separately to each. A shareholder receiving €200,000 from Company A and €200,000 from Company B would pay GESY on both.
GESY on Dividends by Residency Status
| Shareholder Type | GESY Rate | SDC Rate | Total Deduction |
|---|---|---|---|
| Cyprus tax resident, non-domiciled | 2.65% | 0% | 2.65% |
| Cyprus tax resident, domiciled | 2.65% | 5% | 7.65% |
| Non-resident (lives abroad) | 0% | 0% | 0% |
Non-doms have a significant advantage: paying only 2.65% on dividends versus 7.65% for domiciled residents. Combined with 0% income tax on dividends, the non-dom status makes Cyprus exceptionally tax-efficient for dividend income.
Calculation Examples
Example 1: Non-Dom Monthly Dividends
A non-domiciled sole shareholder pays themselves €5,000 per month in dividends throughout 2026.
| Period | Gross Dividend | GESY (2.65%) | Net Received |
|---|---|---|---|
| Monthly | €5,000 | €132.50 | €4,867.50 |
| Annual total | €60,000 | €1,590 | €58,410 |
Example 2: Large Dividend Approaching the Cap
A shareholder receives a €220,000 dividend in a single year.
| Tranche | Gross Amount | GESY Rate | GESY Amount |
|---|---|---|---|
| First €200,000 | €200,000 | 2.65% | €5,300 |
| Excess €20,000 | €20,000 | 0% (cap reached) | €0 |
| Total | €220,000 | — | €5,300 |
Example 3: Domiciled Shareholder Comparison
For the same €60,000 annual dividend, a domiciled resident shareholder pays:
| Item | Amount |
|---|---|
| GESY (2.65%) | €1,590 |
| SDC (5%) | €3,000 |
| Total deducted | €4,590 |
| Net received | €55,410 |
Versus the non-dom at €58,410 net — a difference of €3,000 per year at this dividend level.
The Relationship Between GESY and SDC
SDC (Special Defence Contribution) and GESY are separate contributions both declared via TD603:
- SDC is a defence-related levy, 5% for domiciled residents, 0% for non-doms
- GESY is the health system contribution, 2.65% for all residents
Both are calculated on the gross dividend and both are withheld by the company. For non-doms, SDC is simply zero, so TD603 shows: SDC = €0, GESY = 2.65%.
GESY and the Total Tax Picture for Non-Doms
For a non-domiciled shareholder taking only dividends from their Cyprus company, the complete tax picture is:
| Level | Tax | Rate |
|---|---|---|
| Company level | Corporation tax (IS) | 15% on company profit |
| Dividend level | GESY | 2.65% on gross dividend |
| Dividend level | SDC | 0% (non-dom exemption) |
| Dividend level | Personal income tax | 0% (dividends exempt) |
Total effective rate on pre-tax company profit paid as dividends:
- Company earns €100 profit → pays €15 corporation tax
- €85 available for dividend → shareholder receives €82.75 net (after €2.25 GESY)
- Effective rate on original €100: approximately 17.25%
Non-Resident Shareholders: No GESY
If a shareholder is not a Cyprus tax resident — meaning they do not meet the 60-day rule or 183-day rule — no GESY is withheld. The company should have documentation confirming the shareholder's non-resident status (tax residency certificate from their country of residence or equivalent).
The company must be able to demonstrate to the Tax Department why no GESY was withheld if audited.
Filing TD603: The Mechanics
The company files TD603 on TAXISnet within 30 days of the dividend payment. For a full step-by-step guide to filing TD603, see our TD603 filing guide.
The GESY withheld is remitted at the same time via JCCSmart or Tax Portal. Late filing incurs a €100 flat penalty plus 5% annual interest on the unpaid GESY.
GESY on dividends is the main ongoing tax cost for non-dom solopreneurs in Cyprus. If you want to model different salary vs. dividend strategies, use our salary vs. dividends calculator or consult a Cyprus tax advisor for personalised advice.