ARTICLE · 11 AUGUST 2017

Substance In Cyprus

Shanda Consult Ltd

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The changing regulatory requirements, global tax reforms and initiatives such as the Base Erosion and Profit Shifting (BEPS) action plan undertaken by the OECD raise important questions...

CyprusTax

Shanda Consult Ltd

Originally published 14th October 2016

The changing regulatory requirements, global tax reforms and initiatives such as the Base Erosion and Profit Shifting (BEPS) action plan undertaken by the OECD raise important questions for international financial centres and companies.

Due to the new tax regulations, the business environment is becoming more challenging and companies must adopt proper structure in order to comply with the new requirements concerning tax residency. This is the reason why the importance of substance has lately increased significantly.

Substance determines the company's tax residency and if a company is found to lack substance, it could face investigations by the tax authorities, considerably higher tax burden and additional fines. Thus, substance became an extremely important element of tax planning.

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