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ARTICLE · 30 MARCH 2010

Simplification Of Tax On Interest

Elias Neocleous & Co LLC
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Elias Neocleous & Co LLC

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While the main aim of the changes was to increase the attractiveness of the taxation regime for mutual funds and collective investment schemes, the authorities have also taken the opportunity to simplify the taxation of interest generally.

CyprusWealth Management
Elias Neocleous
Elias Neocleous
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While the main aim of the changes was to increase the attractiveness of the taxation regime for mutual funds and collective investment schemes, the authorities have also taken the opportunity to simplify the taxation of interest generally. The key factor determining the treatment of interest under Cyprus tax law is whether it is active or passive in nature. Active interest is interest received as part of the core activity of the business or closely connected to the core business, such as interest received by a bank. Passive interest is interest received which is incidental to the main activity, such as interest received on surplus funds invested by a retailer.

For interest earned from 1 January 2009 the following rules will apply:

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