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ARTICLE · 14 SEPTEMBER 2015

Tax Measures For A More Competitive And Fair Environment

KPMG in Cyprus
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In an attempt to reduce excessive debt financing and encourage the investing of equity in corporate structures, the new amendments provide for a deduction on new equity by way of a Notional Interest Deduction as of 1 January 2015.

CyprusTax
Angelos Gregoriades
Angelos Gregoriades
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The new amendments to the Cyprus tax system aim primarily to:

  • Attract new equity capital in an attempt to phase-out debt financing
  • Create business substance and attract high-net worth entrepreneurs and individuals by setting out a bundle of attractive incentives

The newest developments in taxation are expected to considerably enhance the competitiveness of the Cyprus tax system without taking away from its already established nature. A second pack is expected to be voted into law in September.

CORPORATE TAXATION

Notional Interest Deduction (NID):

In an attempt to reduce excessive debt financing and encourage the investing of equity in corporate structures (hence reducing the overall debt exposure and de-leveraging the economy), the new amendments provide for a deduction on new equity by way of a Notional Interest Deduction (NID) as of 1 January 2015. The NID will be calculated on the basis of a reference interest rate on new equity held by the

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