Author Archives: Yiannis Athanasiou

Έναρξη Λειτουργίας του Πληροφοριακού Συστήματος «Εργάνη»

Αγαπητοί μας πελάτες,

Θα θέλαμε να σας ενημερώσουμε για τις ακόλουθες σημαντικές αλλαγές που θα εφαρμοσθούν από την 13ην Σεπτεμβρίου 2021 σε σχέση με τις Κοινωνικές Ασφαλίσεις και εγγραφή νέων υπαλλήλων – εργοδοτών ,

Οι βασικές τροποποιήσεις που θα ισχύσουν είναι

1. Η αίτηση εγγραφής εργοδότη υποβάλλεται το αργότερο μία (1) μέρα πριν την ημερομηνία που ο αιτητής αναμένεται να καταστεί εργοδότης.

2. Κάθε εργοδότης γνωστοποιεί στις Υπηρεσίες Κοινωνικών Ασφαλίσεων για την κάθε πρόσληψη μισθωτού το αργότερο μία (1) μέρα πριν την πρόσληψη.
Σημειώνεται ότι η γνωστοποίηση των νέων προσλήψεων θα γίνεται μόνο ηλεκτρονικά μέσω του Πληροφοριακού Συστήματος «ΕΡΓΑΝΗ».
Στην εν λόγω ιστοσελίδα
https://ergani.mlsi.gov.cy.

έχουν αναρτηθεί σχετικές πληροφορίες για τον τρόπο λειτουργίας και τους όρους χρήσης του Συστήματος.
Επισημαίνεται ότι από τις 13 Σεπτεμβρίου 2021 καταργείται η έκδοση και χρήση της «ΒΕΒΑΙΩΣΗΣ ΕΝΑΡΞΗΣ ΑΠΑΣΧΟΛΗΣΗΣ», το γνωστό τρίπτυχο.
3. Κάθε εργοδότης οφείλει να τηρεί μητρώο προσλήψεων, στο οποίο θα πρέπει καταχωρίζει, κατά σειρά ημερομηνίας πρόσληψης, προσωπικά στοιχεία για κάθε μισθωτό (αύξοντα αριθμό, ονοματεπώνυμο, Αριθμό Δελτίου Ταυτότητας, Αριθμό Κοινωνικών Ασφαλίσεων, ημερομηνία πρόσληψης και ημερομηνία έναρξης της απασχόλησης).

4. Επιπρόσθετα, το Υπουργείο Εργασίας, Πρόνοιας και Κοινωνικών Ασφαλίσεων έχει καθορίσει Λειτουργούς Επικοινωνίας σε κάθε Επαρχιακό Γραφείο Κοινωνικών Ασφαλίσεων για περαιτέρω πληροφορίες και βοήθεια, εάν χρειαστεί. Ο κατάλογος των Λειτουργών Επικοινωνίας έχει, επίσης, αναρτηθεί στην πιο πάνω ιστοσελίδα.

Παραμένουμε στην διάθεση σας για οποιεσδήποτε Διευκρινήσεις.

Company’s Annual Return (HE32)-Changes

The Companies Law (Cap.113) has recently been amended to provide for the imposition of administrative fines for the late submission of the Company’s Annual Return (HE32). The new charges will be effective from 18 December 2019.
Based on the latest legislative changes applicable as from 18 December 2019, an increase in administrative fines for late submission of a Company’s annual return is imposed, as follows:

• €50 one-off, plus
• €1 for each overdue day during the first 6 months,
• €2 for each day after the first 6 months with a maximum fine of €500.

Regarding the Annual Reports (HE32) from 2018 and backwards should be submitted by 18 December 2019 (the day the new charges will apply). Otherwise, the new charges will apply.
The Annual Report (HE32) is prepared and a copy thereof is submitted for registration to the Registrar of Companies within twenty-eight (28) days of its drafting date. (e.g. the Annual Report (HE32) dated 31 December 2019 should be submitted by 28 January 2020).
It is important for all companies to have up-to-date audited financial statements to be filed together with the annual return in order to avoid penalties. It should also be reminded that it is good practice for AGMs to take place in Cyprus ensuring attendance of all interested parties.

Σχέδιο Προστασίας της Κύριας Κατοικίας («Σχέδιο Εστία»)

1. Βασικές αρχές του Σχεδίου Εστία
Το Σχέδιο Εστία ή Σχέδιο αφορά Πιστωτικές Διευκολύνσεις οι οποίες πληρούν συγκεκριμένα κριτήρια, όπως αυτά παρουσιάζονται πιο κάτω.
Στο Σχέδιο έχουν δικαίωμα να συμμετάσχουν όλες οι Κυπριακές Τράπεζες και Εταιρείες Εξαγοράς Πιστώσεων που θα υπογράψουν το σχετικό Μνημόνιο Συναντίληψης με την Κυβέρνηση.
2. Βασικές πρόνοιες και προϋποθέσεις
Κριτήρια και προϋποθέσεις για ένταξη στο Σχέδιο:
(α) Οι Πιστωτικές Διευκολύνσεις που κατά τις 30 Σεπτεμβρίου 2017 ήταν Μη Εξυπηρετούμενες.
(β) Η Αγοραία Αξία της Κύριας Κατοικίας κατά την ημερομηνία υποβολής της αίτησης δεν υπερβαίνει τις τριακόσιες πενήντα χιλιάδες ευρώ (€350.000), όπως αυτή θα προκύψει από την/τις εκτίμηση/εις που θα διεξαχθούν.
3. Εισοδηματικά κριτήρια Αιτητών:
Το συνολικό Οικογενειακό Εισόδημα του Αιτητή δεν θα πρέπει να υπερβαίνει τα ακόλουθα για κάθε έκαστο ημερολογιακό έτος 2017 και 2018:
1. τις €60.000 για οικογένεια με τουλάχιστον τέσσερα εξαρτώμενα τέκνα;
2. τις €55.000 για οικογένεια με τρία εξαρτώμενα τέκνα;
3. τις €50.000 για οικογένεια με δύο εξαρτώμενα τέκνα;
4. τις €45.000 για οικογένεια με ένα εξαρτώμενο τέκνο;
5. τις €35.000 για οικογένεια χωρίς εξαρτώμενα τέκνα;
6. τις €20.000 για μονήρη νοικοκυριά.
Νοείται περαιτέρω ότι, τα παραπάνω ισχύουν και για μονογονεϊκές οικογένειες.
Ο Αιτητής θα δικαιούται να συμμετέχει στο Σχέδιο, νοουμένου ότι θα παρέχεται εξασφάλιση υπό μορφή πρώτης σε σειρά προτεραιότητας υποθήκης και/ή πρώτης σε σειρά προτεραιότητας υποθήκης και συνεχόμενων αυτής σε σειρά υποθηκών επί της Κύριας Κατοικίας ή εκχώρησης του αγοραπωλητηρίου εγγράφου για την αγορά της Κύριας Κατοικίας ή σύμβασης χρηματοδοτικής μίσθωσης για την Κύρια Κατοικία.

4. Οφειλέτης Αναδιαρθρωμένου Δανείου Κύριας Κατοικίας
Ο Αιτητής που εγκρίνεται για ένταξη στο Σχέδιο και συμφωνεί να αναλαμβάνει την αποπληρωμή του Αναδιαρθρωμένου Δανείου Κύριας Κατοικίας θα θεωρείται ο Οφειλέτης Αναδιαρθρωμένου Δανείου Κύριας Κατοικίας.
Η διάρκεια αποπληρωμής δεν θα ξεπερνά τα είκοσι-πέντε (25) έτη και θα συναρτάται με την ηλικία του Αιτητή. Αν κάποιος Αιτητής έχει ηλικία μεγαλύτερη των 65 ετών, η διάρκεια αποπληρωμής θα είναι 5 έτη.
5. Επιτόκιο Αναδιαρθρωμένου Δανείου Κύριας Κατοικίας
Το επιτόκιο για τα πρώτα επτά (7) χρόνια αποπληρωμής θα είναι κυμαινόμενο, βασιζόμενο στο Euribor έξι (6) Μηνών, πλέον περιθωρίου δυόμιση (2,5) ποσοστιαίων μονάδων. Το συνολικό επιτόκιο (Euribor 6 Μηνών + περιθώριο) δεν μπορεί να ξεπερνά το τρεισήμισι τοις εκατό (3,5%)ετησίως. Το επιτόκιο για την υπόλοιπη διάρκεια αποπληρωμής του δανείου, θα είναι κυμαινόμενο, βασιζόμενο στο Euribor έξι (6) Μηνών πλέον περιθωρίου δύο (2) ποσοστιαίων μονάδων. Σε περίπτωση όπου το σχετικό Euribor είναι κάτω από το μηδέν, τότε το Euribor θα θεωρείται μηδέν για σκοπούς υπολογισμού του συνολικού επιτοκίου.
6. Διαδικασία ένταξης στο Σχέδιο Εστία και χρονοδιάγραμμα
Διαδικασία υποβολής αίτησης για ένταξη στο Σχέδιο Εστία και προσκόμιση δικαιολογητικών εγγράφων από τον Αιτητή.
Ο Αιτητής συμπληρώνει και υποβάλλει στη Συμμετέχουσα, την αίτηση και όλα τα απαραίτητα δικαιολογητικά έγγραφα και πληροφορίες όπως παρουσιάζονται στο Μνημόνιο Συναντίληψης, εντός της χρονικής περιόδου υποβολής αιτήσεων από 2 Σεπτεμβρίου 2019 μέχρι 15 Νοεμβρίου 2019.

Εάν χρειάζεστε βοήθεια για την αίτηση σας να ενταχθείτε στο “Σχέδιο Εστία” είμαστε στην διάθεση σας

Cyprus changes its rules for passport for investment scheme

The Cyprus government introduced significant new economic & procedural changes to the Cyprus Citizenship by Investment Program, by which investors obtain the Cyprus citizenship. The main objective of the changes is to encourage the creation of an eco-system for business innovation as well as to facilitate the creation of finance for affordable housing through the mandatory contribution to the Cyprus Land Development Corporation. The changes also aim to encourage investment in the shipping sector, as well as promote research & development activities & fund housing schemes. The main changes, are as follows:
• An obligatory donation of €75,000 to the Foundation for Research and Innovation, in order to promote entrepreneurship in Cyprus. An obligation that can be waived under certain conditions, ie where the investor shall invest in an innovative business which has acquired a relevant certificate by the ministry of finance or in a certified social company . The mandatory donation is also waived where the applicant has made an investment under the criterion “Buy or Set Up or Participation in Cypriot Businesses and Companies” amounting to at least 20% of the investment cost of the prerequisite amount (ie € 400,000 ) to a company operating in the primary sector of the economy or in the secondary sector of the economy, or in one of the fields of research and technology, education, health, and renewable energy.
• An obligatory donation of €75000 to the Cyprus Land Development Corporation, in order to implement affordable housing policies.
• The inclusion of investments in the shipping sector will be now included in the eligible investments, based on specific measurable criteria.
• The inclusion of investment in Registered Alternative Investment Funds in the eligible investments, as well as the possibility for these Organisations to invest up to € 200,000 in Cyprus Stock Exchange’s secondary market.
• In the case of residential units already used for the purposes of the Investment programme and are now reused under the same Programme, the provision stipulating that if the applicant has made investments in a residential unit (s) on the basis of criterion “Investments in Real Estate, Development and Infrastructure Projects” is not required to purchase another permanent private dwelling in the Republic of Cyprus if at least one of these dwellings is worth at least € 500,000 will be valid provided that the 3 total investment, including privately owned, is at least € 2.5 million.
• An applicant will now have to maintain his/her investment for 5 years from the date of naturalization, instead of the previous 3 years which was previously the case.
• Applicants will now have the right to change their investments during the 5-year period, provided prior consent is obtained from the Ministry of Finance.
• Where the investment relates to the purchase of real estate or property as well as in the case of a property used as a permanent residency the following will be required:
1. a planning permission issued by the Department of Town Planning and Housing in accordance with the Town and Planning Act (Ν. 90/1972)
2. a completion certificate signed by the architect of the project. When a property is under construction, 5% of the total value of the property should be maintained in a special account or a 5% bank guarantee should be issued in favour of the buyer.
3. In cases where there is a mortgage on the property, a bank waiver must be obtained, confirming the waiver of any rights upon receipt of payment for the mortgage shall be required.
• The main applicant should hold a valid Schengen visa (in case that a visa is required to enter European Union member states). The same applies for the investor’s adult family members that are eligible to apply for the acquisition of the Cypriot citizenship. A Schengen Visa is issued by any of 21 EU countries, plus Iceland, Norway, Switzerland and Liechtenstein, which enables its holder to move freely in the Schengen Area.Holding such a visa means that the applicant has been checked by all Schengen area countries and that none of them has rejected him before.
• An applicant who has applied for the acquisition of citizenship in any other Member State of the European Union and has been rejected will not be entitled to acquire Cypriot citizenship within the framework of the Cyprus Investment Programme.
• Reaffirmation that thee applicant should be in possession of a residence permit in the Republic of Cyprus for at least six months prior to naturalization as a Cypriot citizen.If the applicant does not already hold a residence permit, he will be able to apply for an immigration permit, on the basis of Regulation 6 (2) of the Aliens and Immigration Laws, at the same time as submitting the application for Naturalization, but be a holder of an immigration permit for a period of at least six months prior to naturalization as a Cypriot citizen.
• An Annual Implementation Report that includes the number of naturalizations, nationality of the applicants and the sector in which the investments were made will be prepared for the sake of transparency and correct information.
• Reaffirmation of the ban on the advertising of the Investment Programmes in public places and on the Internet, with particular emphasis on the visibility of the Cypriot passport and the symbols of the Republic and the EU.

The changes are expected to be in force in the upcoming months by the Ministry of Interior. The main objective of the changes is to enhancing trustworthiness and efficiency of the Cyprus Investment Programme as well as widening the investment opportunities with goal of benefitting the economy of Cyprus.

The team of G.P. AuditWorld is ready to assist you regarding the above issue. Let’s talk.

G.P. Auditworld Ltd Payment Alert 1/2019

Dear customers,
Kindly be informed that all Cyprus registered companies irrespective of their year of registration are required to pay the Annual Government Levy of €350. The Levy is payable to the Registrar of Companies by 30 June of each year.
If the Levy is not paid by the due date, the penalties are imposed as follows:
– If the Levy is delayed and paid by 31 August – €385 (penalty of 10%)
– If the Levy is delayed and paid by 1 September – € 490 (the penalty increases to 40%)
Please contact us if you required any assistance with the payment of the Government Levy.

Αγαπητοί πελάτες,

Θα θέλαμε να σας ενημερώσουμε ότι μέχρι τις 30 Ιουνίου (το αργότερο) θα πρέπει να καταβληθεί το ετήσιο τέλος εταιρίας για το 2019.

Καθυστέρηση στην πληρωμή του Ετήσιου Έτους έχει σαν αποτέλεσμα την επιβολή προστίμου ως ακολούθως :
– Αν πληρωθεί μέχρι 31 Αυγούστου – €385 (10% πρόστιμο)
– Αν πληρωθεί μετά την 1 Σεπτεμβρίου – €490 (40% πρόστιμο)

Σας ενημερώνουμε ότι η πληρωμή μπορεί να γίνει από εσάς μέσω της JCC ή μέσω του γραφείου μας με τους ακόλουθους τρόπους :
– Μεταφορά του ποσού πληρωμής στον Τραπεζικό Λογαριασμό του γραφείου μας.
– Μέσω της πιστωτικής σας κάρτας.

Παραμένουμε στην διάθεση σας για το πιο πάνω θέμα.

G.P. Auditworld Ltd Tax Alert 2/2019

Cyprus Commissioner of Taxation Clarifications – National Health Insurance System (NHIS)

The Cyprus Commissioner of Taxation in Cyprus provided clarifications in regards to the National Health Insurance System (NHIS) contributions, which came into effect on the 1^st of March 2019.

Please find below an unofficial translation of the clarifications provided.

· Directors and Secretary

Individual directors and secretaries (irrespective of their tax residency) are considered persons holding an office in a company and, therefore, their remuneration (actual or deemed) is subject to the NHIS. The responsible person for withholding the relevant contributions is the company which will need to withhold the contributions from the officers but at the same time pay its portion as an employer.

The above covers Cyprus tax resident individuals but also non-resident individuals being directors to Cyprus companies earning directors’ fees/remuneration.

· Cyprus tax residents and non-domiciled

Cyprus tax resident and non-domiciled individuals are not exempt from the NHIS contributions. Consequently, such individuals are subject to the NHIS not only on their employment income but also on their word wide income such us foreign pensions, dividends, interest and rental income.

· Profit from disposal of securities

The profit from the disposal of securities will be subject to the NHIS if such profit will be considered as trading profit.

· Exempt income

The following are exempt from the NHIS contributions:

– Income which is exempt under the Cyprus Tonnage Tax Regime i.e. dividends from qualifying shipping activities;

– Income from preserved buildings;

– Income associated with the United Nations

– Income of individuals which are insured in another EU Member State (A1/S1 certificate should be submitted)

· Public bodies and companies paying rents

Public bodies and companies paying rents to individuals are obliged to withholding the relevant NHIS contributions on behalf of the individual landlords.

· Article 5 of the Income Tax Law, as amended

The NHIS contributions are applied on the sources of income mentioned in Article 5 of the Income Tax Law, as amended. The tax exemptions provided under the Income Tax Law, as amended, are ignored for NHIS purposes.

Below is a list of sources of income included in Article 5:

– Profits or other benefits from trading activities

– Holding of an office (directorships and secretaries)

– Employment income and benefits in kind

– Interest and dividends (including deemed dividends)

– Pensions, including overseas pensions

– Amounts of income payable in accordance with a court decision or in accordance with a term included in a will or agreement, as well as an annuity;

– Rents, royalties, remuneration or other profits arising from property, including the value of the owner’s benefit

– Trading goodwill

– 9% deemed benefit relating to interest free financial assistance provided by companies to shareholders/directors.

· 1/6^th Restriction

The NHIS contributions are subject to the 1/6 restriction applicable to individuals for income tax purposes.

The Taxation Department of G.P. AuditWorld Ltd is at your disposal for any inquires or additional information you might request in regards to the above matter.

G.P. Auditworld Ltd Tax Alert 1/2019

We would like to inform our clientele that in the year 2019 an increase in Social Insurance Fund Contributions will come in effect and that contributions for the implementation of the National Health Insurance System (NHIS) will commence:

Social Insurance

According to the Social Insurance Law of 2010, Social Insurance Contributions on insurable earnings will increase by 0.5% from 7.8% to 8.3% for both employees and employers as of January 1, 2019.

Contributions to the social insurance and other relevant funds are calculated on the employee’s gross earnings at the following rates:

	Tax Rate	Tax Amount	Self Employed
	%	%	%
Social Insurance Fund	8.3	8.3	15.6
Redundancy Fund	1.2
Industrial Training Fund	0.5
Social Cohesion Fund	2.0

The rates mentioned above (excluding the rate applicable to contributions to the Social Cohesion Fund) are applied on the employee’s gross earnings subject to the following upper limits.

	Per WEEK	PER MONTH	PER Annum
	€	€	€
Weekly Employees	1050		54652
Monthly Employees		4554	54648

All contributions that are directly withheld from employee’s monthly salary should be paid not later than the end of the calendar month following the month that the contribution relate to.

NHIS-National Health Insurance System

According to the National Insurance law of 2010 (as amended in 2017) employer and employee contributions for the implementation of the system will be commence on March 1, 2019.

Specifically, from March 01,2019 and as of February 28, 2020, first year of the NHIS, employers’ contributions will be 1,85% and the employee’s contributions 1,70% on the employee’s earnings. The employer is responsible for withholding the applicable amount from the employer’s earnings and pay both their own and their employee’s contributions through the Social Insurance office together with the Social Insurance Contributions monthly not later than the end of the calendar month following the month that the contribution relate to.

Please note that NHIS contributions are paid on all employee earnings (as defined in the Social Insurance Law) up to €180,000; the insurable earnings limit of SIF contributions does not apply in this case.

Category	01/03/2019-29/02/2019	01/03/2020 onwards
	%	%
Employees/ Pensioners/ Income Earners	1.7	2.65
Employers	1.85	2.90
Self-Employed	2.55	4.00
The Rebublic or natural/legal person responsible for the remuneration of officers	1.85	2.9
The Rebublic	1.65	4.70

If you have any questions or comments, please do not hesitate to contact us.

George Pitziolis

Director G.P. Auditworld Ltd

Tax Calendar 2019

By the end of next month

Payment of PAYE deducted from employees’ emoluments
Payment of Tax withheld on payments made to non-Cyprus residents
Payment of Special Contribution for Defence withheld on payments of dividends, interest or rent to Cyprus tax residents (where the tenant is a Cyprus company, partnership, the Government or local authority).
Payment of Social Insurance deducted from employees’ emoluments
Payment of National Health Insurance System Contributions

Interest & Penalties

An administrative penalty of €100 or €200 (depending on the specific case), is imposed for the late submission of a tax return. In the case of late payment of the tax due, an additional penalty at the rate of 5% is imposed on the unpaid tax.

The official interest rate for late payment is set annually by the Finance Minister as showed below:

Period	Interest Charge %
1/1/19 - Today	2.00%
1/1/2017 - 31/12/2018	3.50%
1/1/2015 - 31/12/2016	4.00%
1/1/2014 - 31/12/2014	4.50%
1/1/2013 - 31/12/2013	4.75%
1/1/2011 - 31/12/2012	5.00%
1/1/2010 - 31/12/2010	5.35%
1/1/2007 - 31/12/2009	8.00%

Our Tax Team

Our firms highly experience tax team with extensive knowledge of the tax law and tax environment works closely with our clients, individuals and companies, allowing them to fully exploit and benefit from the numerous tax advances of the Cyprus tax system.

We can advise and assist you or your business on any tax related matters locally or Internationally and together we can develop a clear tax plan to ensure legal and regulatory compliance and at the same time minimizing tax liability.

Our services include the following:

Personal Tax Services

Personal tax planning
Preparation and Review of tax computations and tax returns
Income tax and capital gains tasx planning
Dealings with enquiries from the Inland Revenue Department

Corporate Tax Services Locally or Internationally

Preparation and review of tax provisions for financial statements
Preparation and review of tax computations and determining tax liabilities
Determining tax consequences of a specific transaction and advise on the proper tax treatment
Representing clients before tax authorities upon request
Corporate tax Planning
International Tax Planning
Tax structure optimization
Guidance on double tax treaties
Tax opinions on contracts and agreements

Accounting

Our firm offers a plethora of high quality and cost-effective accounting and reporting services to help clients to focus on what they do best, growing their business. We strongly believe that accurate and timely financial information is crucial to client’s management to make informed business decisions.

Our highly skilled and experienced accounting team, uses cutting edge technology and professional accounting programs, guarantees that our clients are administered in the most cost-effective way possible.

Our services include the following:

Book-keeping of company transactions (monthly, quarterly or annual basis)
Preparation of Management accounts and presentation to the Management monthly, quarterly or yearly
Procedures for submission of V.I.E.S. returns.
Payroll Accounting Services
Invoicing Services
Training of client’s staff in maintaining proper books and records
Supervision of clients accounting department
Assume the role of your accounting department

VAT

Value Added Tax (VAT) is imposed on the delivery of goods and services in Cyprus and on the acquisition or importation of goods from other European Member States. VAT laws and regulations are changing constantly, and this specific area of taxation is one of the most complex areas of taxation in the European Union. Heavy penalties and fines can be imposed if the VAT returns with the relevant authorities are not made correctly and in a timely manner.

Our VAT team which consists of experienced VAT specialists can assist and quite you through this complex procedure and insure that all obligations in this area are met in the most cost-efficient way:

Advisory

Specific transactions VAT treatment
VAT reviews to recognise areas of deficiencies and identify risks
Tax planning advise to optimize the overall Vat tax burden

Compliance

VAT Registration
Preparation, review and submission of VAT returns
Maintenance of accurate and proper VAT records
Representations with tax authorities on VAT matters

Contacts

Director

George Pitziolis

[email protected]

Director

Yiannis Athanasiou

[email protected]

Tax Insider 2019

Dear friend,

GP AuditWorld Ltd is an international audit, tax planning, corporate service and business
consulting firm with specialized qualified accountants and auditors from universities in the US,
Greece, and the UK, with keen knowledge and practical experience in their specializations
providing audit, comprehensive tax, corporate and business consulting services to foreign and
local businesses or individuals investing in Cyprus or internationally.
Our broad client base, coupled with our many years’ cumulative experience has allowed our firm
to nurture the specialized professional expertise critical to success, which encompasses a
dedicated client focus and a unique understanding of Cypriot and international business
practices. Above all, our clients are assured of a high level of professional service and focused
attention to their Cypriot business and investment needs.
Investors in today’s complex economic, legal and tax environment, require their advisors to
possess broad-based consulting skills, as well as hands-on experience and knowledge of all
relevant aspects of tax, accounting and operational issues. GP Auditworld’s unique approach to
problem solving employs multivariate analysis to business problems and opportunities, enabling
us to develop creative alternatives and sound recommendations towards achievement of our
clients’ goals.
The publication of Tax Insider 2019 is part of our effort to continuously update our clients and
friends for any changes in key tax issues in Cyprus. Tax Insider 2019 presents information of
general nature which is not intended to address the circumstances of any individual or entity.
You should not act on such information without appropriate professional advice after a thorough
examination of the situation. If you have any questions or concerns regarding your Cypriot
investments or with the information provided with the Tax Insider 2019, please contact us at
your convenience to discuss them.
Best Regards

George Pitziolis
Director

TAX INSIDER 2019

Personal Income Tax

Individuals who spend more than 183 days in one calendar year in Cyprus are consider tax
residents of Cyprus. Days in and out of Cyprus are calculated as indicated below:

The day of an individual arrives in Cyprus counts as a day of residence in Cyprus
The day of an individual departures outside of Cyprus counts as a day of residence
outside Cyprus
If an individual arrives and departs Cyprus in the same day counts as one day of
residence in Cyprus
If an individual departs and arrives Cyprus in the same day counts as one day of
residence outside Cyprus.

In a case where foreign taxes are paid by an individual and the same individual is Cyprus
Tax resident under the residency test then credit can be claimed against the personal tax
liability in Cyprus.

Personal tax rates

The effective tax rates for the year 2019 are;

Income €	Tax Rate %	Tax Amount €	Commulative Tax €
0-19,5000	0	-	-
19,501-28,000	20	1.700	1.700
28,001-36,300	25	2.075	3.775
36,301-60,000	30	7.110	10.885
Over 60,000	35

In cases of foreign pension income is taxed at the flat rate of 5%. An annual exception of
€3,420 is granted. The taxpayer in this category is allowed to elect to be taxed at the
normal tax rates as showed above. The choice can be made from year to year according
to the taxpayer’s choice.

Special Contribution

Special Contribution for a period of three years (1/1/2014-31/12/2016)

A special contribution on gross income for the period mentioned above is
imposed pensioners and self-employed individuals and employees (50% of the tax
contributed by the employer) in the private sector. The special contribution tax is
calculated based on the following table.

Income €	Contribution %	Cumulative tax €
0-1,500	0	-
1,501-2,500*	2.5	25
2,501-3,500	3	55
Over 3,500	3.5
Over 60,000

* There is a minimum amount of special contribution of €10

Exemptions

Tax Exemptions for Individuals are presented in the table below

Dividend Income	100%
Interest Income, except for interest arising from the ordinary business activities, or it is related directlly to the ordinary business activities of an individual	100%
Profits from sale of securities as shares, bonds, debentures etc.	100%
Capital sums accruing to individuals from life insurance plans (under certain conditions) or approved provident funds	100%
Foreign Pension	€3,420
Rent in relation to buildings which there is a Preservation Order (under certain conditions)	100%
Remuneration from salaried services rendered outside Cyprus for more than 90 days in a tax year to a non- Cyprus resident employer or to a foreign pernament establishment of a Cyprus resident employer	100%
Profits from a pernament establishment abroad (under certain conditions)	100%
Lump sum received by way of retiring qratuity, commutation of pension or compensation for deat or injuries	100%
Remuneration from any office or employment of an individual provided that s/he was not resident of Cyprus before employment (applicable for 5 years commencing from the 1st of January following the year of the employment)	20% of the remuneration with a maximum amount of €8,550 annually
Remuneration from any employment exercised in Cyprus by an individual who was not a resident of Cyprus before the commencement of the employment, exemption applies for a period of 10 years for employments commencing as of 1 January 2012 provided the the annual remuneration exceeds €100,000	50% of the remuneration

Tax Deductions

Contributions to trade unions or professional bodies	100%
Special contribution	100%
Deduction for annual life insurance premiums, Provident funds(under certain conditions), Pensions, contributions to the General Medical Fund and contributions to foreign funds (under certain conditions)	Up to 1/6 of the taxable income
Rental Income	20% rental Income minus loan interest and wear and tear allowance
Donation to approved charities (with receipts)	100%
Losses of previous and current five years (in cases of audited financial statements)	100%
Remuneration from salaried services rendered outside Cyprus for more than 90 days in a tax year to a non- Cyprus resident employer or to a foreign pernament establishment of a Cyprus resident employer	100%
Deduction for expenditure for a building in respect of which there is in force a Preservation Order as per the table below
EUR €	Per m2
1.200	1-120
1.100	121-1,000
700	1,001-over

Directors and Shareholder’s loans

If a company grants a loan or other financial assistance to its directors or shareholders
up to their 2
nd degree relatives who are physical persons, then the recipient is deemed to
have a monthly benefit of 9% per year calculated on a monthly basis and is assessed
and collected via the PAYE (pay as you earn) system.

Child benefit

Annual Family Income €	Family with 1 child €	Family with 2 children* €	Family with 3 children* €	Family with 4 children* €
0-19,500	475	570	1045	1675
19,501-39,000	425	520	995	1525
39,001-49,000	380	380	760	1260
49,001-59,00	0	348	690	1135

* Per child
* Amounts are based on previous year family’s income

For single parent families an allowance is granted based on the family’s annual income

Annual Family Income	Monthly Allowance for each independent student
€	€
0-39,000	180
39,000.01- 49,000	160

Preparation of financial statements

From tax year 2006 and after, sole proprietors with annual turnover of more than
€70,000 are obligated to prepare audited financial statements

Corporation Tax

The corporation tax for all companies including Semi Governmental Organizations is
12.5%

Tax Deduction for companies are presented in the table below.

Employer's contribution on salaries such as social insurance and approved funds	100%
Expenses for business entertainment	1% of gross income (max €17,086)
Subscriptions and donations to approved charities with receipts	100%
All expenses used for production of income under centain conditions	100%
Royalty income	80%
Net profit from the disposal of intellectual property under certain conditions	80%
Amortization of the Cost of Aquizition	20%
Amortization of the development of intagible asset	20%
For the period 2012-2014 accelarated depreciation on buildings	7%
For the period 2012-2014 accelarated depreciation for plant and machinery	20%
Interest expense incurred for the acquisition after 1.1.12, of the share capital of a subsidiary company when the participation in the subsidiary is 100% directly or indirectly.	100%

The term intangible assets refer to copyrights, patents and trademarks

Deductions can not be claimed for expenses and interest of a private motor vehicle

Tax Exceptions for companies are presented in the table below

Income from dividends	100%
Profit from the sale of securities	100%
Under certain conditions profits of a pernament establishment abroad	100%
Interest income not accruing or closely connected with the ordinary activities of the company	100%

Tax Incentives

Losses carried forward

Tax loss incurred during a tax year can be set off against future profits for the next five
years.

Group Relief

Tax loss of a company can be set off against the profit of another company which part of
a group and is Cyprus tax resident. Group is defined as follows

One company holding the minimum of 75% of the voting shares of the other
company, or,
Both of the companies are at least 75% held by another third party

Reorganizations

Companies’ reorganizations are allowable without any tax effect under certain
conditions. Reorganizations include

Demergers
Partial divisions
Mergers
Transfer of assets
Exchange shares

Annual wear and tear allowances on tangible fixed assets

Plant and machinery	10.00%
Furniture and fittings	10.00%
Industrial carpet	10.00%
Boreholes	10.00%
Machinery and tools used in agricultural business	15.00%
Buildings	%
Commercial buildings	3.00%
Industrial agricultural and hotel buildings	4.00%
Flats	3.00%
Metallic greenhouse structures	10.00%
Wooden greenhouse structure	33.33%
Vehicles and Means of Trasportation	%
Commercial motor vechicles	20.00%
Motor Cycles	20.00%
Excavators, tractors,bulldozers,self-propelled loaders and drums for petrol companies	25.00%
Armoured Motor Vechicles	20.00%
Speciallised Machinery for the laying or Railroads	20.00%
New Airplanes	8.00%
New Helicopters	8.00%
Sailing vessels	4.50%
Motor Yachts	6.00%
Steamers,tugs and fishing boats	6.00%
Shipmotor launchers	12.50%
New cargo vessels	8.00%
New passenger vessels	6.00%
Used cargo/passenger vessels	Over their useful lives
Other	%
Televisions and videos	10.00%
Computer hardware and operating systems	20.00%
Application Software	33.33%
Expenditure on application software less than €1,709 is written off in the year of acquisition
Wind Pawer Generators	10.00%
Photovoltaic Systems	10.00%
Tools in general	33.33%
Videotapes property of video clubs	50.00%

Social Insurance

Rates

Employer's contributions	8.30%
Employee contributions	8.30%
Self-employed contributions	15.60%

Contributions to social insurance are restricted to the maximum level of annual income
as listed below

	€	Per annum €
Weekly employees	1,051	54,648
Monthly employees	4,554

Other Employers Contributions are listed in the table below

	Employer's contribution
Social Cohesion Fund	2,00%
Redundancy Fund	1,20%
Industrial Training Fund	0,50%
Annual Leave Fund	8,00%

Capital Gains Tax

Any gain arising after the deduction of sales proceeds, of the value of the property at
1.1.1980 or the cost of acquisition after 1.1.1980 adjusted to account for inflation is taxed
at a flat rate of 20%. Lifetime exceptions are listed in the table below.

	Gain up to €
Any disposal	17.086
Disposal of Agricultural land	25.629
Disposal of private residence	85.430

It is important to note that gains accruing from disposal of property held outside the
Republic are exempted from capital gains tax.

Land Transfer Fees

Land transfer tax rates are listed below

Value	Tax Rate %	Transfer fees €	Cumulative €
Up to €85,000	3	2.550	2550
85,001-170,000	5	4.250	6800
Over 170,000	8

Immovable Property Tax

Property owners whose total property is less than €12,500 are exempt from paying
property tax. If the value of the property at 1.1.1980 is more than the exempt amount
mentioned above the property tax can be calculated based on the following table

Value of property 1,1,1980 €	Rate %	Cumulative €
Up to 40,000	0,6% (min € 75)	240
40,001-120,000	0,8	880
120,001-170,000	0,9	1330
170,001-300,000	1,1	2760
300,001-500,000	1,3	5360
500,001-800,000	1,5	9860
800,001-3,000,000	1,7	47260
Over 3,000,000	1,9

Special Contribution to the Defense Fund

Type of Income	Rates
Interest Income	30,00%
Interest Income Received by Provident Funds	3,00%
Rental Income Minus 25%	3,00%
Foreign Dividend Income (Certain Conditions)	17,00%
For individuals only	Rates
Interest from Government Development Bonds	3,00%
Interest with Income Less Than €12,000	3,00%
Dividends Received by Individuals Residents of the Republic	17,00%

Important Tax Dates

31/1- Submission of declaration of deemed dividend distribution (TD623) for the year ended 2016.
31/3- Electronic submission of 2017 corporate tax return (TD4) for accounting periods ending on 31 December 2017 (TD4).

Electronic submission of the 2017 income tax return of physical persons preparing audited financial statements.

30/4- Payment of premium tax for life insurance companies – first instalment for 2019.
30/6- Payment of special contribution for defence for the first six months of 2019 on rents if such ta is not withheld at source by tenant and on dividends or interest from sources outside Cyprus.

Payment of 2018personal income tax under the self-assessment method by self-employed individuals not preparing audited financial statements.

31/7- Electronic submission by employers of the total 2018 payroll (Form TD7).

Submission of the 2019 provisional income tax return and payment of the first instalment.
Electronic submission of 2018 person income tax returns and payment of 2018 personal income tax under the self-assessment of/by employees and pensioners, whose incomes do not include income from a trade/business, rents, dividends, interest, royalties nor income relating to trading goodwill.

1/8- Payment of 2018 final corporation tax under the self-assessment method.

Payment of 2018 personal income tax under the self-assessment method by self-employed individuals preparing audited financial statements.

31/8- Payment of premium tax for life insurance companies – second instalment for 2019.
30/9- Electronic submission of 2018 personal ta returns of self-employed individuals not required to prepare audited financial statements.
31/12- Payment of provisional tax – second and last instalment for 2019.

Payment of special contribution for defence for the last six months of 2019 on rents if such tax is not withheld at source by tenant and on dividends or interest from sources outside Cyprus.
Payment of premium tax for life insurance companies – third and last instalment for 2019.

At the end of each following month the following are due:

Payment of income tax deducted from employee’s salary (PAYE)
Payment of Special Contribution for Defense withheld on payments of dividends, interest and rents made by companies, partnerships, the State or local authorities, made by Cypriot tax residents.
Payment of tax withheld on payments to non-Cypriot tax residents.

In case that the above deadlines are not med, then an annual interest of 4% is charged as well as a penalty depending on the circumstances.

Value Added Tax (VAT)
The Vat tax rates are listed below

Standard VAT Rate (up to February 29 2012)	15,00%
Standard VAT Rate (from 1 March 2013 to 13 January 2013)	17,00%
Standard VAT Rate (from 14 January 2013 to 12 January 2014)	18,00%
Standard VAT Rate (from 13 January 2014 onwards)	19,00%
Reduced VAT Rate (Restaurant, Catering, etc)	8,00%
Reduced VAT Rate (Restaurant, Catering, etc) from 13 January 2014 onwards	9,00%
Reduced VAT Rate (Foodstuffs, Medice, etc)	5,00%
Sale or Construction of New Residential Properties	5,00%
Zero Rate (Export of Goods, Leasing of Aircraft and Vessels)	0,00%

Special VAT reliefs on the importation of certain categories of aircraft and a new scheme covering the lease of pleasure boats in Cyprus
VAT registration threshold

Cases	Registration Threshold
€	€
Supply of goods and services within the Republic	15,600
Supply of goods and services to persons established in other member states where they do not hold a valid VAT number	15,600
Supply of goods and services to persons established in other member states where they hold a valid VAT number	N/A
Services from non Cypriot suppliers and holding companies if their involved in economic activities	15,600
Goods in the Republic from other Member States by individuals or organizations involved with exempt activities (educational istitutions and hospitals)	10,252
Distance sales from person established in other Member State to individuals or non-VAT registered persons within the Republic	35,000

The registration with the Cyprus VAT creates liabilities depending on the circumstances as follows

Submission of VAT return per month or per quarter
Issue of VAT invoices to VAT registered persons or organizations with the right to claim input VAT
Issue of legal receipts to individuals or non-VAT registered persons for the taxable supply of goods or services or the provisional services with affect from 16 January 2012
VIES statement every month for dispatches of goods with destination to other Member States
Intrastat statements for dispatches every month for goods to other Member States provided that the other party has a valid VAT number. For the year 2014 the registration threshold is €55,000
Intrastat statement for arrivals every month for purchasing of goods from other Member States provided that the other party has a valid VAT number. For the year 2014 the registration threshold is €100,000
Within 60 days from the termination of trading operation deregistration from the Cyprus VAT Register is required.

The following penalties for non-compliance with the Cyprus VAT regulation are in place

Failure to registered with the Cyprus VAT €85 per month
Delayed of the VAT return €51 per vat return
Delayed of payment of output VAT €10% one-off penalty and 4.5% annual interest
Delayed of registration with the VIES system €50 per VIES Statement, of VIES Statement €50 per statement, of correction of VIES statements €15 per statement and delayed of submit VIES statements which is also a criminal offence €850 per statement.
Delayed of registration with the INTRASTAT declarations €15 per INTRASTAT Return, of submission of INTRASTAT declarations €15 per INTRASTAT Return, of correction of INTRASTAT declaration €15 per return, failure to submit INTRASTAT returns is a criminal offence and delayed of deregistration from the Cyprus VAT Register €85 one-off penalty.