Cyprus, Elias Neocleous & Co LLC updates

Corporate Tax

Contributed by Elias Neocleous & Co LLC
Reference rates for notional interest deduction for 2018
  • Cyprus
  • March 02 2018

Article 9(B) of the Income Tax Law 2002 (as amended) provides for a notional interest deduction for tax purposes on new equity capital injected into companies and permanent establishments of foreign companies on or after January 1 2015 to finance business assets, calculated by applying a reference rate to the new equity. The Tax Department recently announced the 10-year government bond yields for December 31 2017, which will be used as the basis for the notional interest deduction for the 2018 tax year.

Further extension for applications to settle tax arrears by instalments
  • Cyprus
  • January 26 2018

The Process of Adjustment of Tax Arrears Law 2017 establishes a procedure for settling tax arrears by monthly instalments and provides a waiver of interest and penalties of up to 95% for all nationally imposed taxes. Although the law was enacted in February 2017, it did not take effect immediately in order to allow time for the necessary payment systems to be implemented. The deadline for submitting applications to participate in the scheme was originally set at three months, but was recently extended.

New double tax agreement between Cyprus and Saudi Arabia
  • Cyprus
  • January 19 2018

Cyprus and Saudi Arabia recently signed an agreement for the avoidance of double taxation with respect to taxes on income and the prevention of tax evasion. The agreement provides for the exchange of financial and other information in accordance with the relevant article of the Organisation for Economic Cooperation and Development Model Convention for the Avoidance of Double Taxation on Income and on Capital. It will take effect once formal ratification procedures have been completed.

Taxation of deemed benefits on loans and advances to directors and shareholders
  • Cyprus
  • January 12 2018

The Tax Department recently issued Interpretative Circular 14, which has clarified the application of the Income Tax Law regarding a deemed benefit which is to be assessed on any drawings, loan or other financial facilities granted by a company to a non-resident director or shareholder or their spouse or close relatives. The circular clarifies that the deemed benefit is taxable in full, regardless of the period of residence of the individual in question.

Treatment of additional taxes for deemed distribution purposes
  • Cyprus
  • January 05 2018

The Cyprus Tax Department recently clarified the treatment of additional taxes imposed under the Assessment and Collection of Taxes Law. The department has specified that any additional tax is to be treated as such, meaning that penalties and interest will be imposed if they are not paid on time. The taxes are included under the term 'corporation tax' and are deductible from accounting profits for the purpose of calculating the deemed distribution for special defence contribution tax.


Contributed by Elias Neocleous & Co LLC
Jurisdiction and recognition and enforcement of judgments in civil and commercial matters
  • Cyprus
  • March 20 2018

The issue of jurisdiction was at the centre of a recent action in the Limassol District Court. The decision clarifies the case law relating to the interpretation of Article 7(2) of the recast EU Brussels Regulation and reaffirms the general principle that civil actions are to be brought against individuals and companies in the courts of the place where they are domiciled, except in specific instances where derogations from the general rule apply.

Supreme Court disapproves strict interpretation of Order 30 of Civil Procedure Rules
  • Cyprus
  • February 27 2018

In a recent appeal case, the Supreme Court overturned a first-instance judgment regarding the timing of the completion of the pleadings and, consequently, the deadline for filing a summons for directions under Order 30 of the Civil Procedure Rules. Although the judgment in question examined the previous version of Order 30, it is useful for litigation lawyers as it clarifies when pleadings are deemed to have been completed, which remains the starting point for the deadline to file a summons for directions.

Constitution and quorum of collective administrative bodies
  • Cyprus
  • February 06 2018

A recent administrative court case concerned the legality of a tender for the development of a new €200 million-plus marina in Paphos. The court decision was based on the well-established principle that the decision-making process of any collective body regarding a specific matter must be consistent from beginning to end and requires the presence of the same members of the body in order to ensure that all members are aware of and able to evaluate all factors which come to light during the process.

Court finds that unjustified absence of members invalidates collective body and its decisions
  • Cyprus
  • January 09 2018

A recent administrative court case examined an allegation that an Electricity Authority of Cyprus (EAC) committee established to determine staff promotions had been invalidly constituted. The meeting under review had not been chaired by the EAC chair, as required by the relevant regulations, and no reason for this absence was provided. The court found that the absence of any record of the reasons for the chair's non-attendance at the meeting was sufficient grounds to invalidate the decisions made.

Only completed actions are subject to administrative review
  • Cyprus
  • December 19 2017

A recent case has affirmed that only completed actions can be subject to administrative review, and that an applicant must possess a legitimate interest at three crucial stages in order to pursue an action in the Administrative Court. The case concerned a complaint that a third party had been promoted unfairly in preference to other applicants. However, the applicant had filed his action before the third party accepted the promotion, so that when the action was filed there was no promotion to complain about.

Shipping & Transport

Contributed by Elias Neocleous & Co LLC
Certificates of competency under International Convention on Standards of Training, Certification and Watchkeeping for Seafarers
  • Cyprus
  • March 21 2018

​The Department of Merchant Shipping recently issued an updated list of countries whose certificates of competency are recognised by Cyprus under the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers, as amended. The only change from the previous list, issued in November 2014, is the addition of Jordan.

Department of Merchant Shipping transformed into deputy ministry
  • Cyprus
  • March 14 2018

The Department of Merchant Shipping has announced that it will be a deputy ministry with effect from March 1 2018 and be renamed the Deputy Ministry of Shipping, following the entry into force of the Establishment of a Deputy Ministry of Shipping and Appointment of a Deputy Minister of Shipping and for Matters Connected Therewith Law 2017. As successor to the Department of Merchant Shipping, the deputy ministry will assume all of the former's rights, responsibilities, powers and obligations.

New safety requirements for coastal passenger vessels enter into force
  • Cyprus
  • February 21 2018

Article 47A of the Merchant Shipping (Issue and Recognition of Certificates and Marine Training) Laws provides that crew members on-board coastal passenger vessels who have safety duties relating to passengers must meet the mandatory minimum familiarisation and basic safety training and instruction requirements for all seafarers under Regulation VI/I of the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers.

Renewal of civil liability certificates
  • Cyprus
  • February 07 2018

The Department of Merchant Shipping recently issued a reminder to registered owners, bareboat charterers, managers and representatives of Cyprus-flagged ships regarding the renewal of civil liability certificates. The expiry date for most existing certificates is February 20 2018 and there has been an unprecedented delay in the submission of renewal applications. The department therefore urges parties that require a renewal to apply without further delay.

Amendments to training, certification and watchkeeping standards enter into force
  • Cyprus
  • January 31 2018

The Department of Merchant Shipping recently issued a notification to owners, bareboat charterers, managers and representatives of Cyprus-flagged and foreign-flagged vessels visiting ports in Cyprus. The amendments concern the mandatory minimum requirements for the training and qualification of masters, officers, ratings and other personnel on passenger ships and masters and deck officers on ships operating in polar waters.

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