Cyprus Tax
News: Council of Ministers approves new
property taxes
The Council of Ministers has voted in favour of a
provisional Immovable Property Tax bill in early May. By approving such new
property tax imposition the Government is hoping to collect approximately €136
million. Before the bill is finalised by the end of June, further adjustments
will be made to reach an even more fair final proposal and the finalised tax is
expected to be payable by the end of September 2013. As previously, the
Immovable Property Tax for the year 2013 will be calculated on 1st January 1980
valuations of properties, although efforts are being made by the valuation
Department of the Land Registry to have new valuations on all properties by the
end of 2013 which will reflect current values.
Cyprus natural
gas strategy moving ahead as planned
As per the Minsiter of Commerce, Industry and
Tourism, Mr. George Lakkotrypis, the
required steps for the exploitation of Cyprus’ natural gas reserves and the
establishment of a gas terminal are
under way as planned and in line with all deadlines imposed. The procedures for
the establishment of a national hydrocarbons fund to be managed by the Ministry
of Finance are also moving ahead. In addition, in order to create a single more
efficient organization, the government is considering to merge the Cyprus
National Hydrocarbons Company (KRETYK) with Natural Gas Public Company (DEFA).
Incentives for
investing in Cyprus
·
Increasingly affordable real
estate prices*.
·
New improved scheme for
granting a Cyprus passport.
·
One of the lowest corporation
tax rates in Europe.
*The Cyprus
Real Estate Company
In Cyprus, the profit on disposal of shares is tax exempt and there is
no withholding tax on the outgoing dividends, interest or royalties from Cyprus
to the ultimate investor. It
would be advisable in such situations to use one Company per
property and also, depending on local CGT rules 2 tier structures may be
necessary. In such case, the local subsidiary can sold and NOT the property (essentially
giving Cyprus the taxing right to that gain on the sale of shares and no taxing
right to the country where the gain is realised).
In our first example, the suggestion is to establish one Foreign Company
for each Real Estate unit held in foreign country and establish one Cyprus
holding company. You can sell the shares of the specific Foreign Company.
In the second example the suggestion is to establish one Foreign Company for each Real Estate
unit held in foreign country and establish one Cyprus holding company for each Foreign
Company. You can sell shares of each individual Cyprus Company.
The Advantages in both examples are: Transformation of profit from disposal of Real
Estate to profit from disposal of shares. Both the sale of foreign shares by
the Cyprus holding company and the sale of the Cyprus shares are tax exempt in Cyprus.
New blogs
released by our law firm
We are pleased to present to you the release of our
blogs, one in English and one in Russian which will be updated regularly with
new and useful news and information.
Please feel free to visit any of the two versions of
the blog.
We look forward
to receiving your feedback!
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