On 31 December 2022, the amendments to the Special Contribution for Defence Law were entered into force. The new provisions include the introduction of withholding taxes on outward payments of dividends, interest, and royalties made to companies in jurisdictions included on the EU list of non-cooperative jurisdictions on tax matters (the EU Blacklist).

For the withholding taxes to apply, the direct recipient of the dividends, the interest payments on securities, and the royalties should be a company which is tax resident in jurisdictions included in the EU Blacklist or registered in a jurisdiction included in the EU Blacklist and is not tax resident in any other jurisdiction that is not included in the EU Blacklist.

The withholding tax will be levied as follows, 17 per cent on dividends (where applicable) and 30 per cent on interest.

The withholding taxes do not apply in the case of dividend payments on shares and interest payments on securities, listed on a recognised stock exchange. Furthermore, no withholding tax will apply on any royalty payments made by an individual.

The EU list of non-cooperative jurisdictions for tax purposes can be found here.