A. Athanasiou Group would like to inform you about More Tax Benefits in Cyprus
Our group of companies A. Athanasiou has a long and proud history in construction and development industry.
We are a reliable partner because of our outstanding well known characteristics: high quality, delivery on time, fast-track delivery of title deeds, after sale service, satisfying clients’ needs.
A. Athanasiou Group would like to inform you about more tax benefits in Cyprus.
The Cypriot Government has once again kept its word to investors from all across the world and introduced on 09/07/2015 amendments to its tax legislation making jurisdiction appearing attractive and easy.
The main purpose of these amendments is undeniably to promote Cyprus as the top number one tax jurisdiction in the EU. This will attract more investors in Cyprus whilst simultaneously harmonizing its domestic laws with EU obligations.
The new tax legislation is as follows:
100% exemption from capital gains tax in Cyprus for the disposal of real estate located in Cyprus provided that the real estate has been purchased in the period between the signing of this law and the 31/12/2016 (Law 59 (I)/2015 on Capital Gains Tax). This amendment is very important as the prior applicable regime imposed a 20% capital gains tax on the seller of real estate located in Cyprus.
A 50% discount has been introduced on the duties for the transfer of real estate from the effective date of this law up until the 31/12/2016 (Law 90(I)/2015 on Land Registry Duties and enhancement of procedures). Furthermore new procedures have been introduced in order to protect investors purchasing Cyprus real estate subjected to a prior mortgage.
A very ingenious and radical amendment introducing for the first time the concept of the non-domiciled individual. Thus prior obligations to special defence contribution tax (‘SDC’) for individuals who could qualify as tax resident of Cyprus (183 days rule) will now be no longer applicable, if it can be proved that the said individual is not domiciled in Cyprus. Thus a Cypriot Tax resident who does not have domiciling in Cyprus shall no longer be subjected to for example 30% SDC on bank deposits in Cyprus and/or 3% SDC on rental income arising in Cyprus and/or 17% SDC on dividends received by a Cypriot Company (Law 29(I)/2013 on special defence contribution tax).
This is probably the most important amendment allowing for significant tax deductions for equity investments. As of the 1/01/2015 “new equity capitals” and for a period of one year are to be given a notional interest deduction. The notional interest deduction shall apply on 80% of the taxable profit of a Cypriot Entity or permanent establishment of a non-Cypriot Entity. It should be noted however that the said deduction shall not be applicable in loss making scenarios.
The notional interest will be equal with the interest yield of a10year Cyprus Government bond increased by 3% with a lowest interest of the 10year Government bond on the last day of the year proceeding the said tax year increased by 3%.
It should be noted that the interest of the Republic of Cyprus 10 year bond in 31/12/2015 was at 5.02% (Law 170(I)/2015 on National Interest).
Cyprus has done in once again by the looks of it. It has established itself in the forefront of international tax planning and investments.
These amendments have vast amounts of depth.
What has also been taken into consideration is the requirement of substances and this has pushed the investment in Cypriot real estate forward.
Following the new amendments on National Invest fresh capital is expected to arrive in Cyprus. This just the beginning at this very moment new tax laws are being discussed in the Cypriot House of Representatives and they should be finished by the next month.
At. A.Athanasiou Group we are able to provide you with all the necessary professional guidance and ready to assist you in all your queries.
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