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ARTICLE · 30 MARCH 2016

Recent Tax Developments In Cyprus

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As reported previously in Global Tax Weekly, in July 2015 the Cyprus Government introduced a notional interest deduction ("NID") on new equity capital, aimed at leveling the playing field between debt and equity finance.

CyprusTax
Elias Neocleous & Co LLC
Elias Neocleous & Co LLC
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Rates For Calculating Notional Interest Deduction

As reported previously1 in Global Tax Weekly, in July 2015 the Cyprus Government introduced a notional interest deduction ("NID") on new equity capital, aimed at leveling the playing field between debt and equity finance. For the 2015 tax year and future years, a deduction against taxable profits is available in respect of new equity (paid-up share capital and share premium) injected into companies and permanent establishments of foreign companies on or after January 1, 2015 for the purpose of financing business assets. The deduction, which can be up to 80 per cent of taxable profits before NID, is calculated by applying a reference rate to the new equity.

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