Latest updates

Absence of claimant results in claim dismissal
Elias Neocleous & Co LLC
  • Litigation
  • Cyprus
  • 22 January 2019

The Supreme Court recently upheld a lower court's decision to dismiss an appellant's claim in first-instance proceedings. The claimant had been the only witness in her case, but – after failing to attend the hearing on the appointed date – had requested an adjournment of the case through her lawyers on the grounds that she was unable to attend due to absence abroad for health reasons. The defendant's lawyer had not initially objected to the proposal to adjourn.

New tax exemptions and allowances for film and audiovisual production industry
Elias Neocleous & Co LLC
  • Corporate Tax
  • Cyprus
  • 18 January 2019

The Income Tax Law was recently amended to provide an exemption of up to 50% for income derived from the production of films, series and other relevant audiovisual media. In addition, small enterprises may claim an annual deduction of 20% of the cost of cinematographic infrastructure and technological equipment, provided that it has been used in Cyprus for at least five years.

Amendments to Cyprus-San Marino double tax treaty enter into force
Elias Neocleous & Co LLC
  • Corporate Tax
  • Cyprus
  • 11 January 2019

The Tax Department recently announced that the procedures for ratifying the protocol amending the Convention on the Avoidance of Double Taxation between Cyprus and San Marino have been completed. The protocol, which entered into force on 27 June 2018, replaces the text of Article 25 of the convention with the text of the corresponding article of the Organisation for Economic Cooperation and Development Model Convention 2014.

Tax Department clarifies country-by-country reporting
Elias Neocleous & Co LLC
  • Corporate Tax
  • Cyprus
  • 04 January 2019

The Tax Department recently announced that constituent entities of Cyprus ultimate parent entities (UPEs) will not be subject to local filing in their jurisdiction of tax residence, provided that the tax information exchange arrangement under the Common Reporting Standard Multilateral Competent Authority Agreement has been activated. Further, local filing will not apply to Cyprus-resident constituent entities which have no Cyprus tax resident UPEs.

Amendments to Cyprus-Mauritius double tax treaty enter into force
Elias Neocleous & Co LLC
  • Corporate Tax
  • Cyprus
  • 21 December 2018

The Cyprus Tax Department recently announced that the procedures for ratification of the protocol dated 23 October 2017 amending the Convention on the Avoidance of Double Taxation between Cyprus and Mauritius have been completed, and that the protocol entered into force on 2 May 2018. The protocol replaces the text of Article 27 of the convention with the text of the corresponding article of the Organisation for Economic Cooperation and Development Model Convention 2014.

Tonnage tax: countries whose ships are subject to surcharge
Elias Neocleous & Co LLC
  • Shipping & Transport
  • Cyprus
  • 19 December 2018

The Merchant Shipping (Fees and Taxing Provisions) Law 2010 imposes a surcharge on the tonnage tax payable on qualifying vessels registered in countries which appear on the 'grey list' or 'black list' of the Paris Memorandum of Understanding. On the basis of the 2017 annual report of the Paris Memorandum of Understanding, the Deputy Ministry of Shipping has determined a list of flags that are included in the relevant grey or black list for the purposes of calculating tonnage tax for 2018.

Implementation of EU directive on tax dispute resolution mechanisms
Elias Neocleous & Co LLC
  • Corporate Tax
  • Cyprus
  • 14 December 2018

The Cyprus Tax Department recently published for consultation draft legislation to implement the EU Tax Dispute Resolution Mechanisms Directive. The draft legislation comprises an amending law, which adds two new articles to the Income Tax Law 2002 and regulations to be issued under the second of those articles. The new law is intended to take effect from 1 July 2019.

Supreme Court judgment on appointment of IT experts
Elias Neocleous & Co LLC
  • Litigation
  • Cyprus
  • 04 December 2018

The Supreme Court recently issued an innovative judgment relating to Norwich Pharmacal orders which demonstrates the Cyprus courts' readiness to stay abreast of technological developments. The claimant alleged that he was the victim of fraud and conspiracy in connection with online foreign currency trading. The Supreme Court upheld the first-instance decision to appoint an independent computer expert who would provide the technical expertise required to implement the order for disclosure of the information.

Publication of latest Central Bank of Cyprus ship management survey
Elias Neocleous & Co LLC
  • Shipping & Transport
  • Cyprus
  • 21 November 2018

Cyprus is one of the world's most important locations for ship management, with approximately 60 ship management companies operating in its territory. Since 2009 the Central Bank of Cyprus's statistics department has carried out semi-annual market surveys which collect data on the financial transactions between Cyprus's resident ship management companies and non-residents of Cyprus. The most recent survey, which covers the first half of 2018, was published on 1 November 2018.

Administrative Court's judgment on purported changes to terms of public procurement competitions
Elias Neocleous & Co LLC
  • Litigation
  • Cyprus
  • 20 November 2018

The Cyprus Administrative Court recently resolved the question of to which extent, if any, an action of a contracting authority can modify the published terms of the competition in a public procurement process. The court rejected the recourse filed by the applicant, which had sought to annul the decision of the Municipality of Limassol, as contracting authority, to award the contract to another tenderer.

Court procedure when enforcing European Account Preservation Orders in Cyprus
Elias Neocleous & Co LLC
  • Litigation
  • Cyprus
  • 06 November 2018

EU Regulation 655/2014 recently established a European Account Preservation Order procedure to facilitate cross-border debt recovery. In Cyprus, claimants must file an application for such an order at the district court with jurisdiction over the main dispute. The Cyprus courts have always required appropriate security to be provided for freezing orders and are likely to adopt a conservative approach to prevent abuse of the procedure. It is hoped that the courts of other member states will also adopt a balanced approach.

Ballast Water Management Convention enters into force
Elias Neocleous & Co LLC
  • Shipping & Transport
  • Cyprus
  • 24 October 2018

The Deputy Ministry of Shipping recently announced that the International Convention for the Control and Management of Ships' Ballast Water and Sediments will enter into force in Cyprus on 8 November 2018. The Cyprus shipping authorities will apply the requirements of the convention to ships that fly the flag of a country which is not a party to the convention to the extent necessary to ensure that they are not treated more favourably than ships flying the flag of parties to the convention.

English translation of merchant shipping law made available
Elias Neocleous & Co LLC
  • Shipping & Transport
  • Cyprus
  • 10 October 2018

The Deputy Ministry of Shipping has announced that an English translation of the Merchant Shipping (Recognition and Authorisation of Organisations) Law 2011 is now available on its website. The law sets out common rules and standards for organisations that inspect and survey Cyprus-flagged ships and regulates dealings between such organisations and the Cyprus Maritime Administration. The definitive text of the law is in Greek and the translation is for information purposes.

Requirements for granting mandatory injunctions on interim applications
Elias Neocleous & Co LLC
  • Litigation
  • Cyprus
  • 02 October 2018

A recent Larnaca District Court judgment examined the requirements for granting mandatory injunctions on interim applications. The decision is in line with well-established legal principles, as mandatory orders are an extraordinary remedial process granted not as a matter of right, but rather after the exercise of sound judicial discretion. Their application is restricted to clear and exceptional circumstances in which order needs to be restored without delay.

Tax treatment of non-returnable capital contributions
Elias Neocleous & Co LLC
  • Corporate Tax
  • Cyprus
  • 28 September 2018

The Tax Department recently issued Interpretative Circular 25, which clarifies the tax treatment of non-returnable capital contributions by Cyprus taxpayers to companies that are tax resident abroad. The circular confirms that Article 33 of the Income Tax Law will not apply to debit or credit balances generated by non-repayable capital contributions to non-tax resident companies, provided that a number of conditions are satisfied with full documentary evidence.

Life imprisonment and whole-life imprisonment – a history of Cypriot case law
Elias Neocleous & Co LLC
  • Litigation
  • Cyprus
  • 25 September 2018

Life imprisonment generally does not constitute a whole-life sentence because the prisoner will, in most cases, be eligible for early release after a fixed period set by the court. In exceptionally grave cases, the court may order that life should mean life and that the prisoner should remain incarcerated for the rest of their life. The case of Panagiotis Kafkaris was considered sufficiently serious to merit a whole-life sentence and his release marks the end of a landmark case on this issue in Cyprus.

Taxation of insurance agent earnings
Elias Neocleous & Co LLC
  • Corporate Tax
  • Cyprus
  • 21 September 2018

The Tax Department recently issued a circular clarifying the taxation of insurance agent earnings. A representative of an insurer who is not in an employment relationship with that insurer will be treated as a commercial enterprise whose revenue is derived from fees or commissions for the conclusion of insurance contracts. If their annual revenue exceeds €70,000, the intermediary must maintain accounting records and prepare audited financial statements.

Foreclosure process amended to close appeal loopholes
Elias Neocleous & Co LLC
  • Litigation
  • Cyprus
  • 18 September 2018

In 2014 the Transfer and Mortgage of Properties Law was amended to introduce a streamlined foreclosure process aimed at helping banks to address the persistently high levels of non-performing loans and so-called 'strategic defaulters'. Several of the amendments were ambiguously drafted and borrowers were quick to oppose them, leading to numerous court appeals to suspend foreclosures that had already begun. In order to address this issue, Parliament recently decided on additional reforms.

Abuse of process and res judicata in asset freezing applications
Elias Neocleous & Co LLC
  • Litigation
  • Cyprus
  • 11 September 2018

Abuse of process and res judicata were the main issues examined by the Larnaca District Court when deciding on a recent interim application to freeze assets. The court ultimately held that when deciding whether to issue an interim order, it must consider only whether the applicant has shown an arguable case with a visible chance of success and whether, without the order, it would be difficult or impossible to do complete justice at a later stage.

Carriage of goods by sea: principles of agency and functions of bills of lading
Elias Neocleous & Co LLC
  • Litigation
  • Cyprus
  • 04 September 2018

A recent Supreme Court decision considered the principles of agency and functions of bills of lading and provided a useful summary of this area of law. The case demonstrates the importance of expressly specifying the capacity in which various parties are acting when negotiating or entering into a contract – for example, whether they are acting as principals in their own right or as agents on behalf of someone else.

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