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January 2007: Double Taxation Treaties Update

Baltic States (Estonia, Latvia, Lithuania): The Cyprus Delegation met with the Baltic States (Estonia, Latvia, Lithuania) Delegation in Riga between 24th July 2006 and 28th July 2006 for the second round of negotiations for the conclusion of a Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect of Taxes on Income. There will be a third round in Nicosia at a date yet to be fixed.

Iceland: The Cyprus Delegation met with the Icelandic Delegation in Nicosia between 5th September 2006 and 8th September 2006 for the first round of negotiations for the conclusion of a Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect of Taxes on Income.

India: The Cyprus Delegation met with the Indian Delegation in New Delhi between 16th October 2006 and 20th October 2006. This was the first and final round for the negotiation of a new tax treaty. There is already a treaty in force, signed on 13/6/94 and in force since the year of assessment 1993.

Denmark: The Cyprus Delegation met with the Danish Delegation in Copenhagen between 8th January 2007 and 12th January 2007. This was the first round for the negotiation of a new tax treaty. There is already a treaty in force, signed on 26/5/81 and in force since the year of assessment 1980.

Ukraine: The Cyprus Delegation met with the Ukrainian Delegation in Kiev between 25th October 2006 and 27th October 2006 for the third and final round of negotiations for the conclusion of a Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect of Taxes on Income. The heads of the two Delegations initialled the agreed draft.

Moldova: The Cyprus Delegation met with the Moldova Delegation between 13th November 2006 and 17th November 2006 in the first round of negotiations for the conclusion of a Convention for the Avoidance of Double Taxation with respect to Taxes on Income. The heads of the two Delegations initialled the agreed draft.

Netherlands: The Cyprus Delegation met with the Dutch Delegation in Amsterdam between 27th November 2006 and 29th November 2006 for the conclusion of an agreement for the avoidance of Double Taxation with respect of taxes on Income. The negotiation will continue in Nicosia.

25 October 2006: Cyprus Double Tax Treaty with Seychelles

The double taxation agreement between Cyprus and Seychelles was concluded in Seychelles in the first and final round of negotiations which took place in Victoria Seychelles from the 9th of January 2006 to the 13th of January 2006. The agreement was approved by the Council of Ministers on 1 June 2006 and it was signed on behalf of the Government of the Republic of Cyprus by the Minister of Finance Mr. Michael Sarris in Victoria on 26 June 2006, when the ratification procedure was finalised by Seychelles on that date. The agreement was published in the Official Gazette of Cyprus on 25.10.2006 No. 4073, Supplement VII, pages 165-191 (el) and 192-213 (en).

The provisions of the agreement are mostly based on the OECD Model agreement. The Cyprus taxes covered (article 2) are the income tax, the corporate income tax, the special contribution for the defence of the Republic, the immovable property tax and the capital gains tax.

September 2006: Central Bank of Cyprus - Monetary Policy Committee Decision

Following the latest monetary policy decision taken by the The Monetary Policy Committee of the Central Bank of Cyprus on 1 September 2006, the official interest rates are as follows:

Interest rate on the marginal lending facility: 4,50
Minimum bid rate on the main refinancing operations: 4,50
Maximum bid rate on the liquidity absorbing operations: 4,50
Interest rate on the deposit facility: 2,50

May 2006: Double Tax Treaty Update

Cyprus-Italy
The Cyprus Delegation met the Italian Delegation in Rome in March 2006 for the 3rd round in revising the Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income. The negotiation did not lead to an agreed text of agreement and the two sides are expected to meet in Cyprus for the next round at a date to be fixed.

Portugal
The Cyprus Delegation met the Portuguese Delegation in Lisbon in March 2006 for the 1st round of negotiations for the conclusion of an Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income. Negotiations will continue in the 2nd round in Nicosia.

Ukraine
The Cyprus Delegation met the Ukrainian Delegation in Nicosia in March 2006 for the 2nd round of negotiations for the conclusion of a Convention for the Avoidance of Double Taxation with Respect to Taxes on Income. Negotiations will continue in the 3rd round in Nicosia.

San Marino
The Cyprus Delegation met the San Marino Delegation in May 2006 for the 2nd round of negotiations for the conclusion of a Convention for the Avoidance of Double Taxation with Respect to Taxes on Income. The heads of the two Delegations initialled the agreed draft.

Finland
The Cyprus Delegation met the Finnish Delegation in Helsinki in May 2006 for the conclusion of a Convention for the Avoidance of Double Taxation with Respect to Taxes on Income. The heads of the two Delegations initialled the agreed draft.

28 April 2006: The Special Subsidy (Purchase and Erection of Residence) Law of 2006 (VAT on the first residence)

According to VAT Law of 2000, a supply of immovable property is subject to VAT rate of 15%. A special provision in the law allows for the supplies of immovable property used as first residence (transfer must take place before first use) to be taxable at the reduced rate of 5%. Later legislation has removed this provision but in order to compensate individuals acquiring new residence, the Government has introduced this Law which is grants a subsidy in the following cases:

(a) The purchase of a new residence before the first use which is used as the main and permanent place of residence.
(b) The erection of a first residence by the owner and use of this residence as the main and permanent place of residence.

18 November 2005: The Assessment and Collection of Taxes (Amendment) Law of 2005

The amendments cover changes as to the submission of income tax returns, including the possibility of submitting employee income tax returns to the employer instead of submitting them to the Inland Revenue, self assessment for all, new deadline for payment of tax for self-employed not preparing audited accounts, a minor change in the temporary tax provisions, date of payment of tax under section 38, imposition of interest and additional tax for unreasonable delay and a NEW penalty for not submitting the tax return on time.

13 July 2005: Cyprus ratifies the Double Tax Treaty with Lebanon.

The agreement for the avoidance of double taxation between the two countries, signed on 18 February 2003, has been ratified on 14 April 2005. The agreement has entered into force on 14 May 2005 and is going to apply from the year 2006. The Treaty covers as regards Cyprus, income tax, corporate tax, capital gains tax and special defence contribution, whilst as regards Lebanon, income tax only.

11 July 2005: Double Tax Treaty with France

On the week commencing Monday, 11 July 2005, Cyprus and France held in Paris the second round of negotiations for amending the Cyprus-France Double Tax Treaty.

1 July 2005: The Tax Publication "Cyprus - Tax Outline for 2005"

Please request it by completing the Contact Form under the "Contact us" section

1 July 2005 - The Publication "Cyprus - Doing Business in 2005"

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9 June 2005: Central Bank of Cyprus - Monetary Policy Committee Decision

The Monetary Policy Committee of the Central Bank of Cyprus , decided that the interest rates on the marginal lending facility and the deposit facility, are decreased by 0.50 percentage points to 4.25% and 2.25%, respectively.

During its meeting, the Monetary Policy Committee assessed the extent of the reported foreign currency inflows and the consequent appreciation of the Cyprus pound against the euro. The increase in inflows reflects the enhanced confidence in the pound post-ERM II entry.

30 June 2005: Income Tax Law - EU Savings Directive and EU Parent/Subsidiary Directive

A bill has been presented to the House of Representatives for transposing the provisions of the EU Savings Directive (2003/48/EC) and the EU Parent/Subsidiary Directive (2003/123/EC) into the Cyprus Income Tax Law.

6 June 2005: Double Tax Treaty with Germany

On the week commencing Monday, 6 June 2005, Cyprus and Germany held in Nicosia the second round of negotiations for amending the Cyprus-German Double Tax Treaty. The provisions of the new Double Tax Treaty have not been made available yet, but they are expected to be similar to the existing Treaty provisions.

29 April 2005: Cyprus joins the Exchange Rate Mechanism II (ERM II)

On Friday, 29 th April 2005, the Minister of Finance announced that the strategically important goal of joining the Exchange Rate Mechanism II (ERM II) has been achieved, following the meeting of the competent European Union authorities.

29 April 2004: Income Tax Law - EU Royalty Directive

Cyprus has transposed the provisions of the EU Royalty Directive (2004/76/EC) into its Income Tax Law by an amendment made to the sections 21 and 22 as regards to royalties.