Recently guidance with respect to the tax treatment of a loan write-off by a financial institution, for the benefit of the borrower, has been issued by the tax authority of Cyprus.
According to Circular 2013/14 of 30th May 2013, a partial or complete write-off of a loan will not constitute income subject to tax, pursuant to article 5 of the Income Tax Law (no. 118(I)/2002).
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