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. Contributions are charged on a capped income base of €180,000 per person per year, so the maximum GESY on dividends is €4,770 a year. 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.
Corrected 14 August 2026: earlier versions of this page stated a €200,000 cap applying separately to each income source, and a €5,300 maximum. The correct rule is a single €180,000 base per person covering all income sources together, giving a €4,770 maximum. The figures below are the corrected ones.
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% |
| Maximum annual contribution base | €180,000 per person |
| Maximum GESY on dividends | €4,770/year |
| SDC for non-domiciled shareholders | 0% (exempt) |
| SDC for domiciled shareholders | 5% (since January 2026) |
The €180,000 cap is per person, not per source. The official rule, published by the Health Insurance Organisation, is that "for every natural person, the total maximum annual amount on which contributions will be paid is €180,000", and that ceiling covers all GESY-liable income together: salary, self-employment income, rent, interest and dividends. A shareholder receiving €180,000 from Company A and €180,000 from Company B does not get two caps.
In practice each payer withholds on what it pays, without knowing what the others paid, so someone with several income sources can end up contributing on more than €180,000 over the year. That excess is not written off, but it is not refunded automatically either: you have to claim it. The refund is handled by the Health Insurance Organisation rather than the Tax Department, on the HIO's own application form, supported by documents, and there is a time limit of three years from the end of the year in which the excess was paid. Budget for the paperwork if you draw income from more than one source, and confirm the current form and evidence list with your accountant before filing.
A practical consequence worth planning for: if you already draw a salary from your Cyprus company, that salary consumes part of the same €180,000 base, so the dividend portion of your GESY will be smaller than a dividends-only calculation suggests.
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 Above the Cap
A shareholder with no other GESY-liable income receives a €220,000 dividend in a single year.
| Tranche | Gross Amount | GESY Rate | GESY Amount |
|---|---|---|---|
| First €180,000 | €180,000 | 2.65% | €4,770 |
| Excess €40,000 | €40,000 | 0% (cap reached) | €0 |
| Total | €220,000 | blended | €4,770 |
€4,770 is the ceiling: a €2,000,000 dividend produces exactly the same GESY as a €180,000 one.
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.