CAPITAL GAINS TAX
On 10th of December 2015, the House of Representatives voted a number of significant tax law amendments that were published in the Government Gazette on 17 December 2015.
Capital Gains Tax
Gain from disposal of shares in Companies that indirectly own immovable property located in Cyprus will be subject to capital gains tax in Cyprus.
Until voting of the change in the law, capital gains tax was imposed on disposal of immovable property located in Cyprus or from disposal of shares in Companies own directly immovable property located in Cyprus.
It should be noted that in the case of disposal of shares, the capital gains tax is imposed on the market value of the immovable property.
Also, trading of shares in Companies owning immovable property in Cyprus that was previously considered as trading nature and thus exempt from both income tax and capital gains tax, such gains are still exempt from income tax but they are subject to capital gains tax.
The changes will come into effect as soon as the new law is published in the Office Gazette.