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August, 2015
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  Cyprus Tax Reforms: Cyprus aims to be premier destination of choice for
HNWIs & businesses

On July 9, 2015, the Parliament voted on the most significant changes in the Cyprus tax system since 2003. The amendments to the legislation aim at attracting new equity capital as an alternative to debt financing as well as create a favorable environment for the relocation of existing and establishment of new businesses through personal tax incentives to HNWIs.

Amendments in Corporate Taxation

The revised law provides for Notional Interest Deduction (NID) on new equity injections in corporate entities, including PEs of foreign companies. This applies to both financial as well as in-kind payments contributed starting January 1, 2015. The NID will be calculated based on the effective interest earned on the 10 year government bond yield of the country in which the new equity is invested or that of the Republic of Cyprus, whichever is higher, plus 3%. NID granted on new equity may not exceed 80% of taxable profit and it is not available in the case of tax losses. Taxpayers may elect not to claim NID or claim part of it in each year.

Amendments in Personal taxation – Introduction of the non-domicile principle

The recent amendments to the law, which incorporated non-dom rules, aim to attract HNWIs and corporate executives in relocating to Cyprus. These rules exclude Special Contribution for Defence (SDC) on dividends (17%), interest (30%) and rental income (3%), as well as deemed dividend distributions for individuals who are Cyprus tax resident but are non-domiciled in Cyprus.  The new provisions define domicile in accordance with the Wills and Succession Law and include the main categories of domicile by origin and choice. In addition, any individual who has spent 17 out of the last 20 years as a Cyprus tax resident, will be considered as domiciled in Cyprus. Exception to this are individuals who have obtained and maintained a domicile of choice outside Cyprus and have not been tax residents of Cyprus for a period of 20 consecutive years preceding the tax year or the introduction of the law.

Amendments in Capital Gains tax (CGT) and transfer fee on property acquired

CGT Law has been amended to fully exempt from capital gains, currently standing at 20%, any property acquired as of July 16, 2015 to 31st December 2016, regardless of when such property shall be sold. Properties acquired by donation, gift or exchange and not through purchase, shall not qualify for this exemption. Further, there is a reduction of 50% on land transfer fees for all property acquired up to December 31, 2016. Both initiatives aim at reviving the real estate market through foreign as well as local investments.

How can Amicorp assist you

Please contact us for any further clarifications on the above amendments to the legislation. We can support you locally in:
  • Implementing and managing your structure
  • Understanding potential tax implications
  • Relocate your business and family to Cyprus with full local support on personal and business related matters
  • Identify and acquire property in Cyprus including all compliance related aspects
  For further information, please contact:

Elia Nicolaou
Amicorp (Cyprus) Ltd
15 Dimitriou Karatasou street
Anastasio Building, 6th floor
Strovolos CY-2024
Nicosia, Cyprus
Antonis Melas
Amicorp (Cyprus) Ltd
15 Dimitriou Karatasou street
Anastasio Building, 6th floor
Strovolos CY-2024
Nicosia, Cyprus

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This document is prepared for general information purposes only. Amicorp Group does not provide tax or legal advice to its clients. Any opinions contained herein should not be construed or interpreted as advice provided by Amicorp Group.