ARTICLE · 28 NOVEMBER 2017

Cyprus Notional Interest Deduction

Shanda Consult Ltd

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Cyprus Notional Tax Deduction (NID) is a deduction against taxable profit calculated by applying a "reference interest rate" to new equity injected into companies and used by companies for the performance of its activities under certain conditions and constraints.

CyprusTax

Shanda Consult Ltd

Cyprus Notional Tax Deduction (NID) is a deduction against taxable profit calculated by applying a "reference interest rate" to new equity injected into companies and used by companies for the performance of its activities under certain conditions and constraints. The notional tax deduction in Cyprus enables businesses to deleverage and realise a tax efficient return on new equity, an incentive encouraging companies and investors to increase equity.

Legal Framework

On the 18th of July 2016, the Cyprus Tax Department published the Interpretation and tax Practice for the new "Article 9B" of the Income tax Law 116(1)2015 for the Notional Interest Deduction on new equity with effect from 1st January 2015.

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