New tax amendments in Cyprus! What changes are expected to come?
In 2015 the local Government submitted several draft laws to Parliament which are targeted at economic activity and attraction of direct investments in Cyprus. The project is implemented on the basis of the EU Parent-Subsidiary Directive, as a result, tax regime is being simplified and made more attractive and efficient.
It should be noticed that certain proposals have been already enacted including an obligatory Special Contribution for Defense for non-resident taxpayers, notional interest deduction for new equity capital introduced into companies, and tax exemption for disposals of immovable property acquired from 16 July 2015 to 31 December 2016.
As for other amendments to draft tax laws, they were enacted by the Parliament of Cyprus on 10 December 2015 and they will come into force after publication in the governmental reporter.
New tax amendments in Cyprus include the following:
• New acts simplifying taxation of offshore companies in hydrocarbon activities;
• Adjustment of the recent amendments to the EU Parent-Subsidiary Directive;
• Extension of tax relief for overseas group companies;
• Changes to adjustments of arm’s length business principle;
• Tax neutrality of foreign exchange gains and losses;
• Limitation of losses carried forward to subsequent years on IP activities;
• Anti-abuse measures for reorganizations in companies;
• Extension of income tax exemption for new taxpayers;
• Changes of capital gains tax for companies possessing real property in Cyprus.