Capital Gains Tax Law Amended

Most capital gains are exempt from tax in Cyprus; the only gains that are subject to tax are those relating to real estate located in Cyprus. The Capital Gains Tax Law provides for capital gains tax at a rate of 20% to be charged on gains arising from the sale or transfer of real estate in Cyprus, including gains from the sale of shares in unlisted companies that own real estate in Cyprus, to the extent that the gain derives from the company's real estate assets.

Law 119(I)/2013 and Law 120(I)/2013 have made detailed amendments to the Capital Gains Tax Law.

Law 119(I)/2013 extends the definition of gains subject to capital gains tax to include gains accruing on disposal of rights derived from a contract for sale of immovable property in Cyprus, including the assignment of rights derived from such a contract. This amendment addresses the situation where an initial purchaser of property disposes of its interest in the property by assigning its contract to buy the