The Cyprus House of Representatives has made a series of tax reforms on the 9 July 2015 in order to make the jurisdiction more attractive. There are also a number of reforms that have been deferred until a later date which are also expected to be enacted. These make the most significant changes to the current tax regime since its inception in 2003.
A summary of some of some of the main changes are as follows;
- There is now a new class of residents referred to as ‘non-domiciled’ persons, these will now be exempt from defence tax on their worldwide income.
- Cyprus property purchased between the date the law comes into effect being 17 July 2015 and the 31st December 2016 will be exempt from the 20% capital gains tax.
- Any properties transferred before 31 December 2016 will be entitled to a 50% reduction on the land transfer fee.
- There has been an introduction of a Notional Interest Deduction regime on corporate equity allowing a tax deduction on both equity and debt.
It is believed that the above changes along with the changes still to be approved will improve Cyprus’s international competitiveness as a jurisdiction of choice. If you would like further information on how the above or any of the other tax regime in Cyprus may be of benefit when considering setting up an offshore company please do not hesitate to contact us.