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ARTICLE · 04 MAY 2016

Cyprus Tax Legislation Reform

P. N. Kourtellos & Associates
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In an effort to accelerate growth and attract foreign investment, Cyprus introduced a several amendments to tax law on July 9, 2015.

CyprusTax
Ioanna Demetriou-Kourtellou
Ioanna Demetriou-Kourtellou
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In an effort to accelerate growth and attract foreign investment, Cyprus introduced a several amendments to tax law on July 9, 2015. The laws that have been modified are:

  1. The Income Tax Law;
  2. The Special Contribution for Defence Law; and
  3. The Capital Gains Tax Law

1. The Income Tax Law

Deemed interest deduction on new equity

With the new amendment it is being introduced in Article 9 of the Law a provision which provides for a Notional Interest Deduction (NID) in taxable income of Cyprus tax residents companies. The NID will be calculated as a percentage of the reference interest rate on the new equity. The new equity should have a significant economic or commercial purpose.

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