Elias Neocleous & Co LLC updates

Further reminder of instalment scheme for tax arrears
Elias Neocleous & Co LLC
  • Corporate Tax
  • Cyprus
  • December 15 2017

With the extended deadline for the submission of applications for inclusion in the deferred settlement scheme for tax arrears established by Law 4(I)/2017 now less than one month away, the Tax Department has issued a further reminder of the scheme's main features. For example, all tax returns due must have been submitted and all tax liabilities for periods after December 31 2015 must have been settled or be in the process of being settled in accordance with an agreed payment schedule.

Training subsidy scheme amendments
Elias Neocleous & Co LLC
  • Shipping & Transport
  • Cyprus
  • December 13 2017

Since November 2015 the government has subsidised practical training on board ships for deck and engine cadet officers. The Department of Merchant Shipping recently announced changes to this scheme and the procedure for claiming reimbursement. The scheme has now been extended to cover vessels managed by companies located in other EU member states and a new requirement of at least 750 kilowatts of propulsion power has been introduced.

Settlement agreement releases parties from rights and obligations under initial agreement
Elias Neocleous & Co LLC
  • Litigation
  • Cyprus
  • December 12 2017

The Supreme Court recently reaffirmed the long-established principle that when contracting parties agree to amend or replace an agreement, the new agreement will replace the old one and define all of their rights and obligations. Accordingly, in a case where a settlement agreement is agreed between the parties, but not fully complied with by one of them, the other party cannot reinstate any of its rights under the initial agreement.

Extension of accelerated writing-down allowances for tax purposes
Elias Neocleous & Co LLC
  • Corporate Tax
  • Cyprus
  • December 08 2017

The Income Tax Law was amended in 2012 to introduce accelerated capital allowances for tax purposes on assets purchased between 2012 and 2014, inclusive. For plant and machinery acquired up to the end of 2018, the annual writing-down allowance rate will be 20% or any higher rate applying to the category of assets concerned. For industrial buildings and hotels acquired up to the end of 2018, the annual writing-down allowance will be 7%.

Supreme Court dismisses Marfin's appeal against €100,000 fine from CySec
Elias Neocleous & Co LLC
  • Litigation
  • Cyprus
  • November 28 2017

The Supreme Court recently issued its decision in a case concerning the Cyprus Securities and Exchange Commission's imposition of a €100,000 fine on Marfin for buying shares in Marfin Popular Bank Plc on the Athens Stock Exchange during a closed period, which had contravened the Insider Dealing and Market Manipulation (Market Abuse) Law 2005 and the Code of Conduct for Advisers and Related Persons issued thereunder.

Public consultation on proposed legislation to implement EU Anti-tax Avoidance Directive
Elias Neocleous & Co LLC
  • Corporate Tax
  • Cyprus
  • November 24 2017

The Tax Department recently opened a public consultation on proposed legislation to implement the EU Anti-tax Avoidance Directive, which extends the rules to hybrid mismatches. The consultation period will last until December 8 2017. The consultation documents, which are in Greek, are available on the Tax Department's website.

Tonnage tax: countries whose ships are subject to surcharge
Elias Neocleous & Co LLC
  • Shipping & Transport
  • Cyprus
  • November 22 2017

The Merchant Shipping (Fees and Taxing Provisions) Law 2010 imposes a surcharge on the tonnage tax payable by qualifying vessels registered in countries which appear on the grey or black list of the Paris Memorandum of Understanding. On the basis of the 2016 Paris Memorandum of Understanding annual report, the Department of Merchant Shipping recently determined which flags are included in the relevant grey or black list for the purposes of calculating tonnage tax for 2017.

Settlement of overdue tax liabilities under Process of Adjustment of Tax Arrears Law
Elias Neocleous & Co LLC
  • Corporate Tax
  • Cyprus
  • November 10 2017

The Process of Adjustment of Tax Arrears Law 2017 established a procedure for settling tax arrears by monthly instalments, providing a waiver of up to 95% of interest and penalties and covering all nationally imposed taxes. The Tax Department recently issued an announcement informing taxpayers who have applied to participate in the scheme that strict compliance with the agreed terms is essential. In particular, payments must be made on or before the due date or penalties will be applied.

Department of Merchant Shipping upgraded to deputy ministry
Elias Neocleous & Co LLC
  • Shipping & Transport
  • Cyprus
  • October 25 2017

Law 123(I)/2017 has upgraded the Department of Merchant Shipping to a deputy ministry under the direction of the newly created post of deputy minister of shipping with effect from March 1 2018. The new Deputy Ministry of Maritime Affairs will assume the Department of Merchant Shipping's powers and responsibilities. This upgrade reflects the importance of the shipping sector in Cyprus and the significance that the government places on its development.

Extension of tax exemptions for loan restructuring
Elias Neocleous & Co LLC
  • Corporate Tax
  • Cyprus
  • October 20 2017

In December 2015 Cyprus's tax laws were amended to provide a temporary tax exemption for loan restructurings in order to facilitate and encourage the restructuring of non-performing loans. The exemptions introduced in 2015 were intended to be valid for two years from the date on which the various amending laws entered into force and were therefore set to expire on December 31 2017. However, a number of new laws recently extended the exemptions for a further two years.

Process of Adjustment of Tax Arrears Law amended
Elias Neocleous & Co LLC
  • Corporate Tax
  • Cyprus
  • October 13 2017

The Process of Adjustment of Tax Arrears Law 2017 established a procedure for settling tax arrears by monthly instalments and provided a waiver of interest and penalties of up to 95% for all nationally imposed taxes. The law was recently amended by Law 129(I)/2017, which has extended the deadline for submitting applications from three months after the law took effect to six months.

Reference rates for notional interest deduction for Greece, Italy and Kazakhstan
Elias Neocleous & Co LLC
  • Corporate Tax
  • Cyprus
  • October 06 2017

The Income Tax Law 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 bond yields for Greece, Italy and Kazakhstan which will be used to calculate the notional interest deduction for the 2016 and 2017 tax years.

Changes to Assessment and Collection of Taxes Law
Elias Neocleous & Co LLC
  • Corporate Tax
  • Cyprus
  • September 22 2017

Law 97(I)/2017 has amended the Assessment and Collection of Taxes (ACT) Law 1978. One of the principal changes introduced by the amending law is that the six-year limitation on raising assessments provided for in Articles 21 and 23 of the ACT Law does not apply if the assessment is issued following a court decision. In addition, an administrative fine of up to €20,000 may be imposed for a breach of the ACT Law.

Use of electronic oil record books on board Cyprus-flagged vessels
Elias Neocleous & Co LLC
  • Shipping & Transport
  • Cyprus
  • September 20 2017

Under the International Convention for the Prevention of Pollution from Ships, only wastewater containing a specified proportion of oil may be discharged directly overboard and all discharges must be recorded in an oil record book. The Department of Merchant Shipping recently issued guidance regarding the use of electronic oil record books on board Cyprus-flagged vessels, which follows the recommendations of the International Maritime Organisation's Marine Environment Protection Committee.

Amendments to International Convention on Standards of Training, Certification and Watchkeeping for Seafarers
Elias Neocleous & Co LLC
  • Shipping & Transport
  • Cyprus
  • August 30 2017

Amendments to the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers 1978 and Part A of the Seafarers Training, Certification and Watchkeeping Code recently came into force. The amendments apply to Cyprus-flagged vessels, foreign-flagged vessels visiting Cyprus ports and all seafarers employed on board Cyprus-flagged vessels which are subject to the International Code of Safety for Ships using Gases or other Low-Flashpoint Fuels.

Cyprus implements EU regulation on maritime transport emissions
Elias Neocleous & Co LLC
  • Shipping & Transport
  • Cyprus
  • August 16 2017

The Department of Merchant Shipping recently issued a circular informing owners, managers and representatives of Cyprus-flagged ships of their obligations under EU Regulation 757/2015 on the monitoring, reporting and verification of carbon dioxide (CO2) emissions from maritime transport. Operators of Cyprus-flagged ships must submit a monitoring plan for each of their vessels no later than August 31 2017, indicating the method chosen to monitor and report CO2 emissions.

Courts consider confusion surrounding foreclosures
Elias Neocleous & Co LLC
  • Litigation
  • Cyprus
  • August 15 2017

In order to address the problem of non-performing loans following the 2013 financial crisis, the Transfer and Mortgage of Properties Law was amended in 2014 to speed up and streamline the foreclosure process which allows lenders to repossess and sell properties pledged as security for loans in arrears. With the lower courts unable to agree, significant uncertainties remain as to the application of the new procedure. It now falls on the Supreme Court to reach a decision that will provide guidance and set a binding precedent.

Reporting of advance cross-border rulings
Elias Neocleous & Co LLC
  • Corporate Tax
  • Cyprus
  • August 11 2017

In order to ensure compliance with the EU directives on the compulsory automatic exchange of information in the field of taxation – in particular, in advance cross-border rulings – the Cyprus Tax Department recently launched an initiative to gather information regarding cross-border decisions issued, modified or renewed between 2012 and 2016 (inclusive).

Implementation of new ballast water standards
Elias Neocleous & Co LLC
  • Shipping & Transport
  • Cyprus
  • July 26 2017

The Department of Merchant Shipping recently issued a circular to owners, bareboat charterers, managers and representatives of ships flying the Cyprus flag informing them of proposed implementation arrangements for ballast water management systems under the International Convention for the Control and Management of Ships' Ballast Water and Sediments 2004.

New law for payment of tax arrears by instalments comes into effect
Elias Neocleous & Co LLC
  • Corporate Tax
  • Cyprus
  • July 21 2017

The Process of Adjustment of Tax Arrears Law 2017 establishes a procedure for settling tax arrears by monthly instalments. The law covers all taxes assessed by the Tax Department for tax years up to and including 2015, as well as all amounts payable as a result of the submission of a self-assessment in respect of those tax years in which the tax returns for the relevant tax year have already been submitted but no tax payment has been made.

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