NEW AMENDMENTS TO CYPRUS TAX LEGISLATION

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Agenda:• Notional interest deduction• Real estate incentives• Introduction of term ‘domiciled’

for tax purposes• Other amendments• Proposed/upcoming changes

Notional Interest Deduction

• Significant Tax Deductions for new equity Investments

• Definition of “Notional Interest”

• Starting from 1st January 2015 and for a period of 1 year on “new equity capitals”

• Applicable on maximum of 80% of taxable profit of Cypriot Entity/or permanent establishment in Cyprus

• Not applicable in loss making scenarios. Only applicable if you have profit!

Real Real-estate incentives

Real Estate Incentives

New Ground breaking amendment on Capital Gains Tax:

-100% exemption from capital gains tax

- Provided purchase took place from July 15th to 31st December 2016

50% Discount on Duties and enhancement of procedures:

- 50% discount on real estate transfers from July 9th -31 December 2016 - Fees on property transfers from parent to child have been abolished

- Procedures offering greater protection to real estate investors

Introducing Domicile for Tax Purposes

-The traditional distinction between Cypriot and non- Cypriot Tax Residents (183 days rule)

-The Special Defense Contribution Requirements for Cypriot Tax Residents

- Introducing for the first time in July 2015 the concept of Domicile for Tax Purposes

Introducing Domicile for Tax Purposes (continued)

-Domicile under Cypriot Wills and Succession Laws , determining which jurisdiction to govern the succession of a deceased

-The new introduction: Tax resident of the Republic must also have its domicile of origin in the Republic (and not the domicile of Choice!)

- Tax Resident having domicile of choice shall be exempted from SDC obligation (provided not a tax resident in the last 20 years!)

Other Other amendments

Discretionary offset of liabilities due to the tax department

• Article 13 of the Accounting and Financial Management and Financial Control of the Republic Law N38(I)/2014

• Accountant General has the discretion in the course of processing a payment to a physical entity, to withhold funds which are due to any Ministry or Department, or Independent department or other Special Treasure of the Republic of Cyprus.

Tax rulings• As of October 2015, any company which wishes

to obtain a tax ruling from the tax authorities will need to disclose full information about name of entities involved and full details of actual case

NEW CHANGES COMING SOON

-Tax Exemptions on FX differences

- Limitation of losses in relation to IP activities

- Accelerated depreciation

- Tax allowance on medical insurance

- Group Loss Relief

- New fees

NEW CHANGES COMING SOON

Exemptions on personal income tax when taking up the Cypriot Tax Residency:

• 20% of employment income is exempted from personal income tax for a period of 5 years to a maximum of EURO 8,550 per year (valid until 2020)

• 50% of employment income earned in Cyprus to be exempted from income tax for a period of 10 years provided that the employment income earned is more than EURO 100,000 per year

Possible reduction on SDC on interest income

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ORGANISATION PROFILE

Eurofast is a regional business advisory organisation employing over 200 people in South East Europe & East Mediterranean.

Our team of professionals is capable of efficiently addressing all client needs in one single meeting, using one single language

for all the countries in the Region.

Eurofast in numbers…

Over

200people across South East Europe and East

Mediterranean

21Offices in SEE and East

Mediterranean

5-35Team members in

every office

1Reference point;

1 meeting handles all!

Where can you find usSingle point of Contact, Many Points of View

▪ Lefkosia▪ Athens▪ Thessaloniki▪ Sofia▪ Bucharest▪ Belgrade▪ Tirana▪ Skopje▪ Pristina▪ Banja Luka/

Sarajevo

▪ Zagreb▪ Cairo/ Alexandria▪ Podgorica▪ Kiev▪ Moscow▪ Tbilisi▪ Beirut▪ Erbil

What we are good at…Our Services

•International Tax•Mergers & Acquisitions and Transactional Advisory•Transfer pricing•Accounting services•Financial services•Outsourced Payroll and Employment solutions•Corporate services•Citizenship & Residency services•HR administration

•Banking and Financial services•Business Restructuring & Insolvency•IT specialized services•Tax Planning & Tax Compliance•Real Estate tax•Shipping Tax•Energy Tax•Intellectual property•market entry services

Bringing value to clients with our service

Eurofast is Taxand Cyprus

www.eurofast.eu

Find us online

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