Elias Neocleous & Co LLC updates

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.

Carriage of goods by sea: principles of agency and functions of bills of lading
Elias Neocleous & Co LLC
  • Shipping & Transport
  • Cyprus
  • 29 August 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.

Supreme Court interprets amended Order 30 and meaning of 'completion of the pleadings'
Elias Neocleous & Co LLC
  • Litigation
  • Cyprus
  • 21 August 2018

The Supreme Court recently issued a judgment that interpreted the meaning of the term 'completion of the pleadings' as the start of the time limit for issuing an application for directions in accordance with Order 30 of the Civil Procedure Rules. The court noted that Order 30, Rule 1(c) provides no room for saving a claim if the relevant deadlines have expired. The court then considered the appellant's argument that the time limit had not begun with the completion of the pleadings between the plaintiff and the defendant.

Tax exemptions for loan restructuring implemented
Elias Neocleous & Co LLC
  • Corporate Tax
  • Cyprus
  • 17 August 2018

Following the extension of tax relief for the disposal of immovable property for the restructuring non-performing loans introduced by Laws 96(I)/2018, 98(I)/2018, 99(I)/2018 and 100(I)/2018, the Tax Department has announced that its Form 415 (Disposal of Property due to Loan Restructuring) has been revised and that a new Form 415B (Immovable Property Declaration due to Loan Restructuring – Supplementary Certificate) has been published.

Amendments to tax laws to facilitate loan restructuring
Elias Neocleous & Co LLC
  • Corporate Tax
  • Cyprus
  • 10 August 2018

Parliament recently passed a package of legislative measures that aims to encourage the resolution of non-performing loans. The measures include an extension of the current tax exemptions on transfers of immovable property from a borrower to a lender in the course of a loan restructuring to borrowers that dispose of the property themselves in the open market in order to restructure debt. Both sets of exemptions will be available until the end of 2019.

Clampdown on companies lacking substance
Elias Neocleous & Co LLC
  • Corporate Tax
  • Cyprus
  • 03 August 2018

Recent developments have underlined the need for businesses to have real substance in order to operate and benefit from tax residence in Cyprus. Lack of proper substance may not only lead to the denial of benefits under double tax agreements or EU directives, but may also mean that the company is unable to operate a bank account in Cyprus.

New circular on use of electronic certificates
Elias Neocleous & Co LLC
  • Shipping & Transport
  • Cyprus
  • 01 August 2018

The Deputy Ministry of Shipping recently issued a circular informing recognised organisations, security organisations, registered owners, bareboat charterers, managers and representatives of ships flying the Cyprus flag that it now accepts statutory certificates issued to Cyprus-flagged vessels by recognised organisations in electronic form, provided that they satisfy the International Maritime Organisation requirements set out in its Guidelines for the Use of Electronic Certificates.

Application of Erinford principle
Elias Neocleous & Co LLC
  • Litigation
  • Cyprus
  • 24 July 2018

Cyprus case law imposes strict conditions on the issue of Erinford orders because, if made, they are likely to be in effect in Cyprus for a much longer time than corresponding English orders. This is because the UK Supreme Court's rules provide it with jurisdiction to examine applications for interim orders, while the Cyprus Supreme Court does not examine such applications.

Submission period for applications to settle tax arrears by instalments extended
Elias Neocleous & Co LLC
  • Corporate Tax
  • Cyprus
  • 13 July 2018

The Process of Adjustment of Tax Arrears Law established a procedure for settling tax arrears by monthly instalments. Although the deadline for submitting applications was due to expire on 3 July 2018, it has been extended for a further six months. Applications for inclusion in the scheme must now be made no later than 3 January 2019 and applicants must submit any pending tax returns no later than 31 December 2018.

Tax Department aims to streamline payment of tax liabilities
Elias Neocleous & Co LLC
  • Corporate Tax
  • Cyprus
  • 06 July 2018

One of the Tax Department's main priorities is to streamline and modernise its processes and make it more convenient for taxpayers to deal with the department by facilitating the electronic submission of tax returns and payments, thus removing the need to visit a tax office. The electronic submission of income tax and value added tax returns is now mandatory and the department is undertaking a large-scale public information programme to help taxpayers make the change.

Alignment of Evidence Law with EU Regulation on Electronic Identification
Elias Neocleous & Co LLC
  • Litigation
  • Cyprus
  • 03 July 2018

The Evidence Law has been amended to formally recognise electronic evidence and align it with the EU Regulation on Electronic Identification. Law 53(I)/2018 extends the definition of a 'document' in Article 2 of the Evidence Law to include electronic signatures, electronic seals, electronic time stamps, electronic documents and electronic delivery services as defined in the EU regulation.

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