April 4, 2018

Imposition of Reduced VAT Rate of 5% for the Acquisition and/or Construction of a House for Use as Main and Permanent Residence

The reduced VAT rate of 5% applies to contracts concluded after 1 October 2011 provided they relate to the acquisition and/ or construction of residences to be used as the primary and permanent place of residence for the next 10 years. Certain conditions must be met in order to qualify for the submission of the relevant application to the tax commissioner.
February 5, 2018

New Regulation on Tax Debts

The regulation bringing into life the law on tax amnesty was published on 23/6/2017 in the official Gazette of the Republic of Cyprus. The regulation provides for reduced penalties and interest if the tax is paid by instalments. It covers all taxes which arose up to 31 December 2015. An application to take advantage of this relief must be submitted within three months from the effective date of the law (3 July 2017), i.e. by 2 October 2017 through a specific website application, except for new tax liabilities as under “c” above where the 3 months commence from the date the newly assessed tax is due.
January 1, 2018

Cyprus Signs a Tax Treaty With Saudi Arabia for the Avoidance of Double Taxation

The Republic of Cyprus has recently concluded a Double Tax Treaty with Kingdom of Saudi Arabia. The treaty was signed on the 3RD January 2018. The new treaty shall enter into force upon both Cyprus and Saudi Arabia exchanging notifications that the formal ratification procedures have been completed. The provisions of the treaty with respect to taxes will have effect in both contacting states on or after 1 January post ratification.
January 1, 2018

VAT and Holding Companies: (VAT Interpretative Circular-VAT Treatment of Holding Companies)

The Circular distinguishes between cases whereby there is simple purchasing and holding of shares in companies and where there is management or administration of companies in which shares are held. This fundamental distinction is what will determine whether input VAT can be recovered by the holding company.
November 17, 2017

Interpretation of article 5(2)(G) of income tax law 118(I)2002, as amended

Tax Department issued a circular on 14 November 2017 to clarify an important part of the law. The law stipulates that whenever a company grants a loan or any other financial facility to its directors or shareholders who are individuals, or their spouses or their relatives up to the second degree of kindred, then it will be deemed that this person has a monthly benefit equal to nine per cent (9%) per annum on the balance of such loan or any other financial facility.
November 17, 2017

Amendment of Article 10 of income tax law

On 24th November 2017, the Gazette of the Republic of Cyprus published an amendment in respect of the useful life of non-current (‘fixed’) assets. Until 24th November 2017 the above rates were applied to Plant and Machinery, Hotel Buildings and Industrial Buildings acquired for the years 2012 – 2016 and by this amendment the allowance is extended to such fixed assets acquired during the fiscal years to 2018.
September 17, 2017

Amendments to the assessment and collection of taxes law

On 14 July 2017 an amending law to the Assessment and Collection of Taxes Law was published in the Official Gazette of the Republic of Cyprus as follows: 1. Submission of tax returns 2. Issue of tax assessment notices 3. Additional monetary charge for late payment of tax.
September 17, 2017

The Cyprus non-domicile scheme

In an effort to enhance the competiveness, fairness and simplicity of the Cyprus tax system and to make it more attractive to foreign investors, the Cyprus Government passed on 9th July 2015, among others, the “Domicile” concept. The introduction of the non-domicile rules aims to attract high-earners to relocate to Cyprus, by using Cyprus as a business centre and transferring the headquarters of their business thus creating real substance.
August 30, 2017

Amendments to the Assessment and Collection of Taxes Law

On 14 July 2017 an amending law to the Assessment and Collection of Taxes Law was published in the Official Gazette of the Republic of Cyprus as follows: Submission of tax returns, Issue of tax assessment notices, Additional monetary charge for late payment of tax, Administrative fines.

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