On 17 July 2020, the House of Representatives of Cyprus approved a bill amending Section 9(1)(l) of the Income Tax Law (ITL) which introduced a number of changes with respect to the tax treatment of intangible assets.
As per section 9(1)(l) of the ITL, any expenditure incurred for the acquisition or development of an intangible asset, which is incurred by a person carrying on a business for which the Commissioner is satisfied that it has been incurred for the benefit of such business, is deductible for income tax purposes.
The amended provisions are summarized below:
- As of 1 January 2020, the obligation to prepare a balancing statement upon a transfer/sale of an intangible asset is abolished.
- The law was amended to provide that the unused tax depreciation and the right to claim such depreciation can be carried forward and may be claimed by the taxpayer as additional tax depreciation during the remaining useful life of the asset with effect as from 1 January 2020.
