Cyprus, Elias Neocleous & Co LLC updates

Corporate Tax

Contributed by Elias Neocleous & Co LLC
New Cyprus-Luxembourg double tax agreement enters into force
  • Cyprus
  • June 22 2018

The double tax agreement between Cyprus and Luxembourg recently entered into force. It will apply to income arising from 1 January 2019 with regard to taxes deducted at source and for tax years beginning on or after that date for other taxes. The agreement includes a preamble which makes clear that it is not designed to create opportunities for double non-taxation or reduced taxation through evasion or avoidance and a principal purpose test-based general anti-avoidance rule.

Domestic law aligned with EU directive on mandatory automatic exchange of tax information
  • Cyprus
  • May 11 2018

The recently introduced Law 33(I)/2018 amends the Law regarding Administrative Cooperation in the Field of Taxation 2012 to 2017 in order to align domestic law with EU Directive 2016/881/EU, which amended EU Directive 2011/16/EU on administrative cooperation in the field of taxation. The new law requires ultimate parent entities of multinational enterprises resident in Cyprus for tax purposes to file country-by-country reports within 12 months of the end of each fiscal year.

New Cyprus-UK double tax agreement
  • Cyprus
  • April 06 2018

Cyprus and the United Kingdom recently signed a new double tax agreement. Once it has been ratified by both parties, it will replace the current agreement, which dates back to 1974 and is one of the oldest tax agreements still in force in Cyprus. The changes introduced will have little direct effect on the tax liability of most taxpayers, but the modernisation of the agreement will provide clarity.

Tax Department circular clarifies VAT treatment of dividends
  • Cyprus
  • March 30 2018

Cyprus holding companies are widely used in the context of international business structuring to optimise the channelling of inbound and outbound investments with countries that have signed a double tax treaty with Cyprus. The Tax Department recently issued a circular on the value added tax treatment of holding companies, which aims to provide clarity regarding the circumstances in which Cyprus holding companies can be deemed to be earning income that may constitute taxable income.

Final date for submission of corporate tax returns for 2016
  • Cyprus
  • March 23 2018

​The Tax Department recently announced that companies and self-employed individuals that are required to submit annual accounts will be given an additional three months to file their tax returns for the year ended December 31 2016. The department has also issued a circular clarifying the requirement to produce audited financial statements to support tax returns.


Litigation

Contributed by Elias Neocleous & Co LLC
Supreme Court confirms jurisdiction to determine claims arising in exclusive economic zone
  • Cyprus
  • June 12 2018

In a recent case filed in its admiralty jurisdiction, the Supreme Court of Cyprus had to consider whether accidents which take place in the Cyprus exclusive economic zone (EEZ) give jurisdiction to the Cyprus courts. The court decided that it has jurisdiction to hear disputes regarding accidents which occur within its territory, including the Cyprus EEZ, provided that the accident concerns the prospection or exploitation of Cyprus's natural resources.

Doctrine of payment into court
  • Cyprus
  • May 22 2018

Order 22 of the Civil Procedure Rules provides that in any action for debt or damages, the defendant may at any time, on notice to the claimant, pay into court a sum of money which it considers sufficient to satisfy the claim. Payment into court can be made as soon as an appearance has been filed and until a judgment has been issued. If the amount offered is accepted, the dispute is settled as by compromise, but it does not give rise to res judicata.

Strict application of security for costs rules
  • Cyprus
  • May 15 2018

In Cyprus, as in most jurisdictions, a defendant in litigation which fears that the claimant may be unable to satisfy costs orders made against it can apply to the court for a security for costs order. In civil proceedings, the courts – in certain circumstances – can order the claimant to provide security for the defendant's costs after the trial has ended. However, specific requirements must be fulfilled, and the courts are strict in applying the rules.

Supreme Court decides on acquittal and right to appeal
  • Cyprus
  • April 24 2018

The need for clear and reliable guidelines to determine whether a first-instance criminal court judgment can be appealed arose in a recent application to the Supreme Court. By making an application under Article 149 of the Criminal Procedure Law instead of an appeal, the applicant not only lost the right to appeal, but also found his case dismissed by the Supreme Court without any examination of its substance.

Supreme Court decision breached European Convention on Human Rights
  • Cyprus
  • April 17 2018

The European Court of Human Rights recently reviewed disciplinary proceedings against a former judge that had taken place in the Supreme Court in 2006 and resulted in the judge's dismissal. The court found by a majority of six votes to one that the disciplinary proceedings in Cyprus were in breach of Article 6(1) of the European Convention on Human Rights and ordered the Cyprus government to pay non-pecuniary damages and costs.


Shipping & Transport

Contributed by Elias Neocleous & Co LLC
Supreme Court confirms jurisdiction to determine claims arising in exclusive economic zone
  • Cyprus
  • June 06 2018

In a recent case filed in its admiralty jurisdiction, the Supreme Court of Cyprus had to consider whether accidents which take place in the Cyprus exclusive economic zone (EEZ) give jurisdiction to the Cyprus courts. The court decided that it has jurisdiction to hear disputes regarding accidents which occur within its territory, including the Cyprus EEZ, provided that the accident concerns the prospection or exploitation of Cyprus's natural resources.

International Convention for the Control and Management of Ships' Ballast Water and Sediments ratified
  • Cyprus
  • May 23 2018

Cyprus recently ratified the International Convention for the Control and Management of Ships' Ballast Water and Sediments. Its objective is to prevent, reduce and control pollution of the marine environment – especially the spread of harmful aquatic organisms from one region to another – and the consequential damage to health and natural resources. To meet this objective, the convention establishes standards and procedures for the management and control of ships' ballast water and sediments.

Publication of latest Central Bank ship management survey
  • Cyprus
  • May 16 2018

Since 2009, the Central Bank has carried out semi-annual market surveys of Cyprus residents who provide ship management services to ship-owning companies registered in Cyprus and abroad. The surveys collect data on financial transactions (revenues and expenses) between resident ship management companies and non-residents of Cyprus. The most recent survey, which covers the second half of 2017, was published on April 27 2018.

Certificates of proficiency in training for ships operating in polar waters
  • Cyprus
  • May 02 2018

The Deputy Ministry of Shipping recently announced that from January 1 2020, all masters, chief officers and officers in charge of a navigational watch serving on board Cyprus-flagged vessels operating in polar waters must hold the appropriate certificate of proficiency in training, as required by the International Maritime Organisation's International Code for Ships Operating in Polar Waters.

New standards for recreational and personal craft
  • Cyprus
  • April 25 2018

The Department of Merchant Shipping recently announced the publication of the Essential Requirements (Recreational Craft and Personal Watercraft) Regulations 2017. The new regulations set required standards for design and construction and exhaust and noise emissions. They apply to recreational and personal craft, specified components when placed on the EU market, engines and engine conversions and substantial modifications to vessels.


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