Tax Legislation – Recent amendments

Introduction:

On 18 April 2013 the House of Representatives voted a number of amendments to different Tax Laws,adopting different decisions taken during the Eurogroup meetings held in March 2013.

1.  The Income Tax Law:

 i.  Increase of Corporate Income Tax rate: The Corporate Income Tax rate is increased from 10% to 12,5%

 Effective date: 1 January 2013

ii.  Utilization of Credit Institutions Tax Losses: Where the operations of one credit  institution are  transferred to another        pursuant to the Resolution of Credit and other Institutions Law, the credit institution acquiring these operations will be able to utilize the tax losses of the credit institution transferring its operations. The above losses will be available to be utilized for a period not exceeding 15 years from the end of the tax year in which the operations were acquired and the tax losses transferred.

Effective date: 25 March 2013

2. The Special Contribution for the Defence of the Republic Law:

i.  The rate of special defence contribution on interest received or credited or deemed to be received or credited to Cypriot tax residents (both individuals and corporations) is increased by 15% and the new applicable rate will be 30% (previously 15%).

It is noted that the above law does not amend the existing provisions in respect of income from dividends.

Effective date: from the date of its publication in the Government Gazette

March 2013

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