On 30 June 2022, a package of measures containing comprehensive transfer pricing (“TP”) requirements for businesses has been voted into law by the Cyprus House of Representatives. The measures are in line with the recommendations of the Organisation for Economic Co-operation and Development (OECD) within the framework of Action 13 of the Base Erosion and Profit Shifting (BEPS) project. The new rules have been implemented via amendments to the Cyprus Income Tax Law (ITL) and the issuance of Regulations. The Assessment and Collection of Taxes Law has also been amended to introduce penalties for non-compliance with the new TP documentation…

1. Reduction of the administrative penalties for late submission of Annual Returns (HE32) The House of Representatives has recently voted amendments regarding the penalty imposed from the late submission of Annual Returns (HE32) to the Department of Registrar of Companies. According to Cyprus Companies Law, all Cyprus companies are obliged to file Annual Returns to the Registrar of Companies, which must be accompanied by the Company's financial statements of the previous year. Further to the new amendments, Cyprus Companies that fail to submit the Annual Return on time will have a reduction of the maximum penalty from EUR 500 to…

DEFINITION OF A TRUST Incorporating an international trust provides a variety of financial planning opportunities. The use of the Trust as a vehicle of International Tax planning and business structuring is constantly growing. Trusts are used today more than ever before in a myriad of circumstances, many of which would have been impossible to conceive at the time the concept was originally formed.  THE TRUST The concept of a trust is legally defined as a relationship created during one’s lifetime or upon death by a person (the settlor) who places assets under the control of another person (the trustee) for…

Cyprus has been one of the first EU countries to transpose the Alternative Investment Fund Managers Directive into law. Further to this, it now offers an effective and flexible legislative framework for all types of Investment Funds. How can we help ? Choosing the right form of your AIF We examine the alternative forms that the fund can take so that it meets your requirements. Preparation of the application package: We can prepare the full application package that needs to be submitted to the Regulator. During this process, our experienced team will advise you on how better to structure your…

CYPRUS: AN IDEAL IP LOCATION Intellectual Property (IP) can be one of the most valuable assets of an organisation. Choosing the right location for the centralisation and management of IP is a very important strategic business decision. The ideal location to establish an IP structure is one that can serve the organisation’s business strategies/model, safeguard and protect its IP and contribute to its tax optimisation. Cyprus offers an efficient IP tax regime coupled with the protection afforded by EU Member States and by the signatories of all major IP treaties and protocols. FOREWORD In October 2016 the Income Tax Law…

Implementation in January 2022 On the 15th of October 2021, the Cyprus government announced a new strategy for attracting businesses to Cyprus. https://www.youtube.com/watch?v=cHGO0rsJjKY Amendment of the International Business Companies policy for Companies that will be part of the newly established Business Facilitation Unit: Salary/position-based categories of employment (Directors, Key Personnel, Specialists) will no longer apply and a general Minimum salary of €2.500 is introduced for all highly skilled employees, provided that they have the required academic skills or at least 2 years of experience. The validity of the residence and work permit can be up to 3 years. Maximum number…

According to the Cyprus Income Tax Law, all Cypriot tax resident companies that expect to have taxable income for the year 2021, must proceed with the submission and payment of the provisional tax for the year 2021 in two equal installments before, or on, the following dates: 31 July 2021 – Payment of 1st instalment31 December 2021 – Payment of 2nd instalment It is noted that, the final tax liability for the tax year 2021 should be settled by 1st of August 2022. We remind you that the corporate tax rate is 12.5%.    The late submission of the return and the late payment of…

https://www.youtube.com/watch?v=adKx4hbUCR8 Cyprus, with its strategic location, great accessibility and excellent infrastructure, in combination with the numerous government incentives, is a prestigious tax-incentive EU financial center. Cyprus has substantially implemented the international agreed tax standards and is included in the 'White List' of OECD. The numerous Double Tax Treaties concluded with other countries, offer tremendous possibilities for international tax planning through Cyprus. It should be noted that Cyprus is one of the few countries in the world that has concluded tax treaties with Eastern European Countries. Tax Incentives of Cyprus Companies Corporation tax rate 12.5%, lowest in Europe Established wide network…