New amendments to Cyprus Tax Legislation
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Transcript of New amendments to Cyprus Tax Legislation
NEW AMENDMENTS TO CYPRUS TAX LEGISLATION
.
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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