Elena Christodoulou was born in Limassol, Cyprus.
She obtained a LLB (Honours) degree in law at University of Surrey in the UK in 2010 and was awarded a scholarship for all three years of attendance, followed by an LLM in International Commercial Law at University of Cardiff in 2011. She was admitted to the Cyprus Bar in 2012.
She speaks English and Greek.
Main areas of practice:
Corporate and commercial law
The COVID-19 pandemic has led to the imposition of various measures on a global scale which have inevitably put restrictions on the physical presence of persons at their workplaces. This has raised concerns in relation to the permanent establishment of businesses and the tax residence status of legal persons. The Organisation for Economic Cooperation and Development recently issued general guidelines for the interpretation of possible tax issues caused by the COVID-19 pandemic.
Cyprus and Russia recently signed a protocol amending the double tax treaty (DTT) between the two states. Businesses in Cyprus that will be subject to the protocol are advised to review their corporate structures and assess what impact, if any, the DTT changes will have on their overall effective tax exposure.
Cyprus recently agreed an updated double tax treaty (DTT) with Switzerland. The amendments made to the DTT focus on business profits, associated enterprises, mutual agreement procedures and benefit entitlement, and the amending protocol introduces the mandatory minimum standards of the Organisation for Economic Cooperation and Development's Base Erosion and Profit Shifting actions regarding arrangements on bilateral conventions and verbal amendments agreed bilaterally.
The Tax Department recently informed the Cyprus International Businesses Association that it expects its new electronic taxation service to be operational imminently. The Tax Gateway aims to provide a central point via which all citizens, businesses and their representatives can gain information about debts owed and payments made to the department.
The government has introduced a variety of tax measures intended to help taxpayers preserve their cash flows and ease the administrative burden on them during the COVID-19 health emergency. In this regard, the deadlines for payment of indirect taxes and those pertaining to tax returns have been extended.
The Cyprus-Kazakhstan double tax treaty recently entered into force. The agreement – which is the first of its kind between the two countries and closely based on the latest Organisation for Economic Cooperation and Development Model Tax Convention framework – is to be welcomed in view of the possibilities for business, transactional work and business synergies that it may help to create between the two countries.
Tackling e-commerce fraud is high on the European Union's political agenda, with significant effort being put into creating new rules to combat value added tax fraud in particular. An important step in this regard has been the introduction of a significant number of changes to the existing rules on e-commerce taxation.
Innovation and entrepreneurship are heavily sought after by countries looking to ameliorate and modernise their economies. Cyprus is no different in this respect and has prioritised creating a vibrant landscape which addresses the needs of start-ups and their investors. The defining features of the Cypriot system are its IP box regime, notional interest deduction, alternative investment funds and various tax incentives which can be coupled with research and development and innovation.
The European Union has added further impetus to its objective of providing greater transparency with regard to harmful tax practices through an amendment to EU Directive 2011/16/EU. The directive has introduced the mandatory reporting of cross-border arrangements that are indicative of potentially aggressive tax planning. The relevant disclosure requirements must be followed by intermediaries and, in some instances, taxpayers.
The House of Representatives recently approved legislation implementing the EU Anti-tax Avoidance Directive in Cyprus with the aim of improving the resilience of the internal market against cross-border tax avoidance practices. The new legislation has once again demonstrated the government's commitment to supporting international efforts to tackle tax avoidance practices.
Article 9(B) of the Income Tax Law 2002 (as amended) 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 1 January 2015 to finance business assets, calculated by applying a reference rate to the new equity. The Tax Department recently announced the 10-year government bond yields for 31 December 2018, which will be used as the basis for the notional interest deduction for the 2019 tax year.
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.
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.
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.
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.
Cyprus and Andorra have recently signed a double tax agreement, which is closely based on the latest Organisation for Economic Cooperation and Development Model Convention. The agreement includes a preamble which makes clear that it is not designed to create opportunities for double non-taxation or reduced taxation through evasion or avoidance, as well as a principal purpose test-based general anti-avoidance rule.
The double tax agreement between Cyprus and Luxembourg recently entered into force. It will apply to income arising from 1 January 2019 with regard to taxes deducted at source and for tax years beginning on or after that date for other taxes. The agreement includes a preamble which makes clear that it is not designed to create opportunities for double non-taxation or reduced taxation through evasion or avoidance and a principal purpose test-based general anti-avoidance rule.
The recently introduced Law 33(I)/2018 amends the Law regarding Administrative Cooperation in the Field of Taxation 2012 to 2017 in order to align domestic law with EU Directive 2016/881/EU, which amended EU Directive 2011/16/EU on administrative cooperation in the field of taxation. The new law requires ultimate parent entities of multinational enterprises resident in Cyprus for tax purposes to file country-by-country reports within 12 months of the end of each fiscal year.
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).
The double tax agreement between Cyprus and Jersey recently entered into force following completion of all the requisite ratification procedures. It will take effect with regard to taxes withheld at source in respect of amounts paid or credited on or after January 1 2018 and for other taxes in respect of tax years beginning on or after that date. The new agreement applies to taxes on income and gains from alienation of movable or immovable property.
Cyprus transposed the EU Parent-Subsidiary Directive into domestic legislation when it updated its tax laws in preparation for EU membership in 2004. The Income Tax Law and the Special Contribution for the Defence of the Republic Law provide a liberal system of double taxation avoidance, which also extends to non-EU countries, as the tax laws treat all non-residents of Cyprus in the same way.
The Inland Revenue Department recently issued a circular clarifying the practical application of the new five-year limit for carrying forward losses for relief against future profits. For the 2012 tax year and subsequent years, only losses incurred in the 2007 tax year and later years are available for relief against taxable income. Relief is no longer available for unutilised losses relating to 2006 and earlier years.
Under the arrangements for the taxation of loans to directors and shareholders, a physical person who maintains a debit balance in the books of a company in which he or she is a shareholder or director is deemed to enjoy a benefit equivalent to 9% a year on the debit balance. However, a recent tax authority ruling confirms that if the individual concerned is not resident in Cyprus, there will be no liability to tax.
One of the recent amendments to the tax and company laws was the introduction of the amending Assessment and Collection of Taxes Law, which aims to facilitate the exchange of information in the field of taxation. Among other changes, the tax authorities can now refrain from informing persons when they are the subject of any tax investigation process if they consider that it might jeopardise the effectiveness of the investigation.
The House of Representatives recently voted into law an amendment to the Income Tax Law which extends the 20% deduction previously available to expatriates who earned an annual gross employment income of less than €100,000 for an additional five years. Additionally, a provision has been inserted to ensure that the relief will apply to qualifying persons for five years from the start of employment.
There are numerous advantages available to expatriates who take up employment in Cyprus. For each tax year, a 50% deduction is available to those who earn employment income of more than €100,000 annually or a 20% deduction for those earning below €100,000. Applications for the 20% deduction were meant to close at the end of 2020, but a draft bill suggesting its prolongation for an additional five years has been put before Parliament.
Cyprus has elevated its ultimate beneficial owner (UBO) reporting status by implementing all of the mechanisms for the creation, operation and maintenance of a UBO register. The UBO register is a requirement emanating from the amended Fourth EU Anti-money Laundering Directive, which was transposed into national legislation in 2018. According to a recent announcement by the Companies Registrar Department, relevant entities must submit information on their UBOs within six months of 22 February 2021.