Penalties on late payment of Taxes

Penalty of 5% is imposed on all the unpaid taxes one off if the payment is not effected on due date plus another 5% one off if the tax return is not submitted within 30 days after the deadline. Additional flat penalty of Eur 100 is imposed on late submissions …

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Decrease of Public Interest Rate

The Public Interest Rate is decreased from 5% to 4,75% as from 1st of January 2013 onwards. This interest is imposed on late payment or refund of tax liabilities. The previous Public Interest Rates were as follows: Up to 2006:              9% From 2007 – …

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Amendments to the Income Tax and VAT Legislation

Recent amendments to the Income Tax and the VAT legislations were recently voted by the House of Representatives, the summary of which are stated below. INCOME TAX LAW The House of Representatives has voted on 25 October 2012 to extend the law on special settlement of the tax liabilities up …

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Amendments on The Double Taxation Treaty Cyprus – Poland

The protocol amending the double taxation treaty between Cyprus and Poland has been signed on behalf of both countries on 16 March 2012. The protocol has been ratified by Cyprus on 30 March 2012. The protocol introduces a number of amendments to the existing Double Taxation Treaty, the summary of …

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Tax on Rental Income

The rental income earned by a Cyprus tax resident, either physical or legal person, from an immovable property situated either in Cyprus or abroad is subject to taxation in Cyprus as follows: Physical person – Income Tax The Rental income earned by physical persons is added with the employment income …

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Recent amendments on the Tax legislation

The House of Representatives of Cyprus has approved on 24 May 2012 a number of amendments on the Tax legislation. These amendments apply from the fiscal year 2012 onwards. These amendments were approved in an effort to boost the economy and to increase the attractiveness of Cyprus for foreign investments. …

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Recent amendments on the VAT legislation

VAT on Construction Services The VAT Department announced recently an amendment on the VAT treatment of construction services. As from 9th of March 2012, provision of construction services from a VAT registered person to another VAT registered person qualifies for zero rate VAT. The supplier should clearly state in the …

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Reporting requirements and tax residency rules

Reporting Requirements All Cyprus resident Companies are required to appoint accountant who will maintain the Company’s accounting records and post the transactions in the accounting system. As per the tax legislation, the accounting records should be updated within 4 months from the date of the transaction. The Company is required …

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Acceptable margins on back to back loans

Cyprus Companies are widely used in international tax structuring mainly due to the flexible tax system and the extended network of double tax treaties between Cyprus and other countries. There are certain advantages that have made Cyprus also a favorable financing company jurisdiction.If Cyprus company is used as a Financing …

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