Cyprus has announced a series of tax reforms which aim to sustain Cyprus as an even more attractive choice for Individuals and companies aiming to structure their worldwide investments using Cyprus as the jurisdiction of choice for holding vehicles.
The key points are:
- Notional interest – tax allowable deduction on share capital and other corporate equity.
- Exemption from Special Defence Contribution for dividends and interest received by foreign individuals that relocate to Cyprus and become Cyprus tax residents.
- Extension of the employment income exemption of an individual who is not a Cyprus tax resident from 5 years to 10 years. The exemption is 50% of income tax for remuneration exceeding 100,000 Euro.
- Group loss relief provisions to apply to cases where the surrendering company is tax resident in an EU member state.
- Foreign exchange differences will be ignored for tax purposes and will not be taxable or tax deductible.
- 50% reduction on land registry transfer fees until the end of 2016.
- Capital gains tax exemption for immovable property purchased by the end of 2016.
- Extending the accelerated capital allowances for buildings and machinery.
