• Homepage
  • >
  • Posts
  • >
  • The effect of the new General Healthcare System (GHS) on a Cyprus Company

The effect of the new General Healthcare System (GHS) on a Cyprus Company

 Here is a brief outline of the obligations that GHS may impose on a Cyprus Company.

If you consider that you or your company may be affected by these new requirements, please contact us for further explanations and assistance.

1. Introduction

In 2019, the Cyprus Government introduced the General Healthcare System (GHS) (also referred to as GeSY or National Health Insurance Scheme).

For the implementation of the GHS, a special fund was established for purposes of gathering the relevant contributions, and from which all payments to providers of healthcare services will be made. The GHS fund will be administered by the Health Insurance Organisation (HIO).

The payment of the contributions for the first phase started on 1 March 2019 and implementation was due to begin on 1 March 2020. 

However, due to the coronavirus pandemic, although the 2nd phase contributions commenced on 1 March 2020, the 1st phase contributions were reinstated for the months of April to June 2020. The 2nd phase contributions were reintroduced from July 2020.

2. Brief outline of GHS Contributions

In general, the GHS contributions are levied as follows:

  • In respect of companies

             – A Company is subject to GHS only as an employer (ie on the remuneration paid to its employees)

  • In respect of individuals

             – by Cyprus tax resident individuals (both domiciled and non-domiciled) on their worldwide income

             – by Cyprus non tax resident individuals only on their Cyprus sourced income.

Important Note: GHS contributions are capped at €180.000 of annual income.

3. Effect of GHS on a Cyprus Company

        a. As explained in 2 above, a Cyprus Company is only subject to GHS if it employs individuals in Cyprus.

        b. All income of a Cyprus Company is exempt from GHS.

        c. A Cyprus Company is required to withhold GHS contributions from the salaries to its employees in Cyprus, as well as on certain payments to Cyprus tax resident individuals. The GHS withheld is payable to the competent Cyprus authorities.  (These include payments for rent of immovable property located in Cyprus, and dividends, including deemed dividends, as well as pension payments to former employees, and interest on loans from Cyprus tax resident individuals). 

        d. The rates of contribution of both employees and employers are as follows:

Contributors Categories


      (i) March 2019 to February 2020 and (ii) April, May, June 2020

      (i) March 2020, and (ii) From 1 July 2020 onwards

Employees (public & private sector)






      e. The rates of contribution deducted from certain payments paid to Cyprus tax resident individuals are as follows:

Type of payments


        (i) March 2019 to February 2020, and (ii) April, May, June 2020

        (i) March 2020, and (ii) From 1 July 2020 onwards

Interest on loan, Rent, Dividends (including deemed)



Pensions payable to former employees

For more information on how we can assist you with this matter please contact Mr Antonis Kassapis (tel 00357 22379210) or email uhy@uhy.com.cy

The contents of this article should be considered to be of a general nature only not referring to any particular business.  Before proceeding with any action, please request further advice relating specifically to your business.  We will be very pleased to be of assistance

Related Articles