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Alerts on tax law amendments and other tax related matters are issued periodically to keep you up-to-date with the latest local tax developments.

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Tax and VAT measures voted following the Coronavirus outbreak

30 March 2020

Following our alert on the preliminary tax and VAT measures announced by the Cyprus Government following the Coronavirus outbreak (Issue 05/2020 dated 16/03/2020), the Cyprus Parliament proceeded with the voting of the relevant tax and VAT laws on 27 March 2020.

Download the full alert for measures relating to:

  • General Healthcare System (GHS) Law: Decreased GHS contributions for April, May and June 2020
  • Law Regulating the Settlement of Overdue SocialContributions: Deferral of payments that are due forthe months of March and April 2020
  • VAT Law: Temporary deferral of VAT payable

How can we help? We are at your disposal to discuss the above and advise youof the potential impact on your activities.

Cyprus Business Process Solutions News: Measures announced by the Department of Registrar of Companies and Official Receiver in response to COVID-19

27 March 2020

In the context of the measures taken by the government to support companies / businesses affected by the restrictive measures imposed to limit the spread of COVID-19 (Coronavirus), the Department of Registrar of Companies and Official Receiver issued an announcement on 23 March 2020.

Download the full alert for specific measures.

How can we help? We are at your disposal to discuss these developments with you and how these affect your business.

Further clarifications regarding the Tax and VAT  measures announced by the Cyprus Government following the Coronavirus outbreak

18 March 2020

Following our communication with the Health Insurance Organisation and the Ministry of Finance, we understand that the intention of the Cyprus Government is for the reduced contributions to the GHS to apply for the months of April and May 2020 and this will be applicable for all contributors.

Effectively, the increased contribution rates to the GHS will apply as planned for the whole of March 2020.

Download the full alert for a table specifying the period of application of the
relevant contribution rates to the GHS per contributor’s category. 

Tax and VAT measures announced by the Cyprus Government following the Coronavirus outbreak 

16 March 2020

The recent outbreak of COVID-19, is proving to be an unprecedented challenge for humanity. Having been declared a global pandemic by the World Health Organization, the virus is already impacting our day to day lives as well as our businesses. In light of the business disruption caused by the Coronavirus, the Cyprus Government announced a number of measures in order to support the country’s economy. Download the full alert for further details.

As we appreciate that clarifications may be required for the correct implementation of the above measures, we are in direct contact with the Ministry of Finance and we will aim to revert with further guidance as soon as possible.

Refund on GHS Contributions 

12 March 2020

On 7 February 2020, the Health Insurance Organization (“HIO”), in exercising the powers conferred to it by the General Health System Legislation (“The Law”), issued instructions in relation to refunds on GHS Contributions.

These instructions lay down the procedure for requesting a refund on GHS contributions paid in excess of the maximum amount on which GHS contributions apply.

How are you affected?

Contributors who have paid GHS contributions on total amounts of income in excess of €180.000 per annum have the right to a refund and can exercise their right by submitting the relevant application form to the HIO.

Increase of contributions towards the General Healthcare System (GHS)

27 February 2020

Following the first phase of the newly introduced healthcare system in Cyprus, which came into force on 1 March 2019, we would like to inform you that as from 1 March 2020 the contribution rates to the GHS will increase.

Download the full alert which includes a table with the increases in contribution rates per category and the income limit.

Amendments to the Law regulating the settlement of overdue taxes

24 February 2020

Following our tax  alert in July 2018 (edition 10/2018), relating to the Law Regulating the Settlement of Overdue Taxes, we would like to inform you that on 14 February 2020 a law was published in the Government Gazette which provides amendments to the Law.

Download the full alert for a description of the amendments and how these may affect you.

VAT refund on the purchase of a plot by a private individual

31 December 2019

The Cyprus tax authorities announced on 24 September 2019 that
individuals who had purchased undeveloped building land on or after 2 January
2018 for the sole purpose of constructing a dwelling to be used as their
principal and permanent place of residence would be entitled to a partial
refund of the VAT paid.  

How you  may be affected by the above decision: Individuals who purchase separately the plot of land to be used for the construction of their principal and permanent residence have the right to a partial refund of the VAT paid (14% of the value of the plot).

The alert is also available in Greek.

Increase of the limit for certain allowances for individuals from one-sixth (1/6) to one-fifth (1/5) 

20 December 2019

On 19 December 2019, an amending Income Tax Law (ITL)
was published in the Official Gazette, providing for an increase to the annual
limit for certain allowances which are deductible from an individual’s taxable
income.

Deemed Dividend Distribution as at 31 December 2019

19 December 2019

We would like to remind you of the deemed dividend
distribution (DDD) provisions of the Special Contribution for the Defence Law
that apply on 31 December 2019.

  • What profits are within the scope of the DDD provisions?
  • When do the DDD provisions apply?
  • What are the penalties for late payment of the SDC and GHS due?

2019 Provisional Tax – Reminder 

06 December 2019

We would like to remind you of the following upcoming deadlines:

  • 31 December 2019: Submission of a revised provisional tax return for 2019
  • 31 January 2020: Payment of 2nd provisional tax instalment for 2019

Cyprus Administration Court Judgement relating to catering services

12 November 2019

On  10 September 2019 the Administration Court in Cyprus issued its judgement in relation to a case involving a business which was operating as a pub/restaurant with an in-house kitchen offering food until 11pm.

How you are affected by the above judgement: Businesses engaged in the catering business should examine their VAT treatment applied based on the above Court Judgement.

The alert is also available in Greek.

New tax treaty signed with Egypt

29 October 2019

On 8 October 2019, Cyprus signed a new tax treaty with Egypt, a neighboring  country with a growing economy. The treaty was published in the Gazette on 25 October 2019 and once effective, it is going to replace the existing tax treaty between the two countries that has been in effect since 1996.

New administrative penalties for late filings to the Registrar of Companies

22 October 2019

Following recent amendments to the Cyprus Companies Law, Cap. 113 (“the Law”), the Registrar of Companies will impose administrative penalties on certain filings submitted after the prescribed timeframes as provided by the Law. The imposition of the administrative penalties will be effective from 18 December 2019.

Transfer Pricing requirements introduced on the 2018 Tax Return

04 October 2019

We would like to inform you that the Cyprus Tax Authorities (CTA) have recently published the 2018 Corporate Income Tax Return (TD4) which you can find here for your reference. The 2018 TD4 includes two new important requirements in Part 3, relating to transfer pricing as shown below.

Deloitte Tax Resources

12 September 2019

We are pleased to share with you a number of Deloitte tax resources available to help you stay up-to-date with the latest local and international tax developments.

All resources are easily accessible from any device.
 

Reminder of the upcoming submission deadlines for CbC Reporting obligations

11 September 2019

We would like to remind you that 31st December 2019 is the submission deadline for the following Country-by-Country (“CbC”) Reporting obligations in Cyprus:

  • Submission of CbC Reports for the 2018 Reporting Fiscal Year (in respect of MNE groups which have a year end of 31 December 2018)1.
  • Submission of CbC Notifications for the 2019 Reporting Fiscal Year (in respect of MNE groups which have a year end of 31 December 2019)1.

Payment of final tax for the year 2018 for companies and self-employed individuals preparing audited financial statements

11 July 2019

We would like to remind you that the 1st of August 2019 is the deadline for the payment of the final tax for the year 2018 for companies and self-employed individuals preparing audited financial statements.

In case the tax balance is not paid by the end of the month of the deadline date (i.e. by 31 August 2019) a 5% penalty applies on the tax due. In addition, the tax balance will be subject to interest at the rate in force (currently at 2% per annum) until the settlement of the tax. Finally, if the tax balance is not settled within two months after the deadline date, an additional 5% penalty may be imposed.

Reduction of SDC rate applicable on interest income received by Cyprus tax resident domiciled individuals from corporate bonds

08 July 2019

On 26 June 2019 an amendment to the Special Defence Contribution (SDC) Law was published in the Official Government Gazette.

According to the amendment, effective from 26 June 2019, the SDC rate applicable on interest income received by Cyprus tax resident domiciled individuals from corporate bonds is reduced from 30% to 3%. The reduced rate is now in line with the SDC rate applicable on interest earned from Government bonds.
 

Payment of 1st provisional tax instalment for tax year 2019

05 July 2019

We would like to remind you that the deadline for the payment of the first provisional tax instalment for tax year 2019 is the 31st of July 2019.

Provisional tax payment obligation

The following persons should consider whether a provisional tax payment would arise based on their expected annual taxable income:

  •  Individuals with taxable income other than salaries, pensions, dividends and interest, and
  •  Companies with taxable income.

Cyprus – Kazakhstan tax treaty signed and published

28 May 2019

On 15 May 2019, Cyprus signed a tax treaty with Kazakhstan which was published in the Gazette on 24 May 2019.

This is an important development as Kazakhstan is the 9th largest country in the world, the largest of the former Soviet republics (excluding Russia) and a growing economy.

Amendments to the Income Tax Law for the adoption of rules against tax avoidance practices

09 April 2019

Also available in Greek

On 5 April 2019, the House of Representatives voted into law the provisions of the European Council Directive for the adoption of rules against tax avoidance practices that directly affect the functioning of the internal market (known as Anti-Tax Avoidance Directive – ATAD).

The Directive stems from the action plan against Base Erosion and Profit Shifting (BEPS), which is the result of the initiative of the G20 and the member countries of the Organization for Economic Co-operation and Development (OECD) to combat tax evasion through the transfer of profits to countries with preferential tax regimes.

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Records and supporting documentation that should be kept by employers in relation to Benefits in Kind

28 March 2019

Also available in Greek.

Tax Treatment of the Benefits in Kind (BIK)

Further to our previous tax alert dated 11 December 2018, (issue 16/2018), we would like to inform you that the Tax Department has issued Interpretative Circular 32, which clarifies the forms and supporting documentation that should be kept by the employers for each tax year and be available to be provided to the Tax Department in case requested or in case of an examination.

Links to forms: 

FORM T.D.286 A (English)
FORM T.D.286 F (English)

ΤΦ 286 Α (Greek)
ΤΦ 286 Φ (Greek)

Impact of Brexit on VAT refund claims for business expenses incurred in the UK in 2018

06 March 2019

Our Indirect Tax Alert aims to inform you of the impact that the imminent Brexit will have on the deadline for claiming refund of the VAT on business expenses incurred in the UK during 2018 in accordance with Directive 2008/09/EC (formerly 8th Directive). The Directive enables businesses established and registered for VAT purposes within the EU to request a refund of the VAT incurred on business expenses in other EU member states.

 

Tax and other incentives for the film industry

19 December 2018

On 11 December 2018, an amendment to the Income Tax Law (ITL) was published in the Official Government Gazette, providing tax incentives to companies involved in film productions.

The incentives are offered within the context of implementing a scheme approved by the Council of Ministers on 27 September 2017, aiming to attract film production companies to Cyprus. In addition to the two tax incentives provided in the ITL, the scheme provides for other (non-tax) incentives as well.

Extension of submission deadline for CbC Reports

19 December 2018

We would like to inform you that on 18 December 2018 the Cyprus Tax Department has announced that the submission deadline for Country-by-Country (“CbC”) Reports for the 2017 Reporting Fiscal Year has been extended from 31 December 2018 to 31 January 2019. The relevant announcement can be found at the Tax Department’s website.

Provisional tax for 2018 - Reminder

We would like to remind you of the upcoming deadline for the payment of the second instalment and the option to submit a revised provisional tax return for 2018.

As mentioned in our previous tax alert, the following persons have an obligation to submit a provisional tax return:

  • Individuals with taxable income other than salaries, pensions, dividends and interest (ΤD5)
  • Companies with taxable income (ΤD6)

Tax treatment of Benefits in Kind

11 December 2018

Also available in Greek.

The Tax Department has recently published an Informative Guide, in the Greek language, which explains the tax treatment of certain benefits offered by employers to employees and persons who hold or are deemed to hold an office. It is soon expected that the Informative Guide will also be issued in English in the official website of the Tax Department.

Deemed Dividend Distribution for 2018

20 November 2018

Also available in Greek

We would like to remind you of the deemed dividend distribution (DDD) provisions of the Special Contribution for the Defence Law that apply on 31 December 2018.

Tax treatment of Benefits in Kind

19 October 2018

Also available in Greek.

The Tax Department has recently published an Informative Guide, in the Greek language, which explains the tax treatment of certain benefits offered by employers to employees and persons who hold or are deemed to hold an office.

 

Reminder of the upcoming submission deadlines for CbC Reporting obligations

21 September 2018

We would like to remind you that 31st December 2018 is the submission deadline for the following Country-by-Country (“CbC”) Reporting obligations in Cyprus:

  • Submission of CbC Reports for the 2017 Reporting Fiscal Year (in respect of MNE groups which have a year end of 31 December 2017).
  • Submission of CbC Notifications for the 2018 Reporting Fiscal Year (in respect of MNE groups which have a year end of 31 December 2018).

Φορολογικές τροποποιήσεις σχετικά με τις αναδιαρθρώσεις δανείων

3 August 2018

Θα θέλαμε να σας πληροφορήσουμε ότι η Βουλή των Αντιπροσώπων ψήφισε σειρά τροποποιήσεων στους ακόλουθους νόμους:

  • Περί Φορολογίας του Εισοδήματος Νόμος
  • Περί Φορολογίας Κεφαλαιουχικών Κερδών Νόμος
  • Περί Έκτακτης Εισφοράς για την Άμυνα Νόμος
  • Περί Χαρτοσήμων Νόμος
  • Περί Κτηματολογικού και Χωρομετρικού Τμήματος Νόμος

Submission of provisional tax return for 2018

5 July 2018

Also available in Greek.

Deloitte would like to remind you that the submission deadline for the provisional tax return for 2018 is the 31st of July 2018.

Obligation to submit a provisional tax return

The following persons have an obligation to submit a provisional tax return:

  • Individuals with taxable income other than salaries, pensions, dividends and interest (ΤD5)
  • Companies with taxable income (ΤD6)

Extension to the Law Regulating the Settlement of Overdue Taxes  

4 July 2018

Also available in Greek.

On 29 June 2018, the Parliament voted for an amendment to the Law Regulating the Settlement of Overdue Taxes.

The amendment provides for a six month extension to the deadline for the submission of applications for relief from interest and penalties on overdue taxes, for tax years up to and including 2015.
 

Transfer Pricing requirements introduced on the 2018 Tax Return

04 October 2019

We would like to inform you that the Cyprus Tax Authorities (CTA) have recently published the 2018 Corporate Income Tax Return (TD4) which you can find here for your reference. The 2018 TD4 includes two new important requirements in Part 3, relating to transfer pricing as shown below.

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