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 Administrative Court recently ruled in a case concerning the differentiation in treatment, by law, between women and men of deceased spouses. The court held that the rejection of a man's application for a widower's pension was based on a legislative provision which was directly discriminatory against men, in that it treated men substantially differently to women by making the granting of a widower's pension subject to special conditions which were not required for the granting of a widow's pension.
The Supreme Court recently overruled a first-instance decision which had acquitted the respondent and its director of charges concerning the non-payment of monthly salaries to monthly paid staff. The Supreme Court's approach appears to be a reasonable one. It illustrates the need to ensure employees' right to receive their salary and the benefits to which they are entitled on the basis of their employment agreement.
In a recent appeal, the Supreme Court ruled that the first-instance court could not ignore testimony adduced during a hearing without having evaluated it. In its decision, the Supreme Court stressed that where there is a disagreement as to the substantive facts of a case, the evaluation of testimony is the cornerstone of any decision. The absence of judgement as to whether a substantial witness has told the truth will render the court's decision incomplete.
The European Court of Human Rights (ECHR) recently sentenced Cyprus for the death of a 26-year-old soldier. The ECHR found that the Cypriot authorities' investigation into Athanasios Nicolaou's death had infringed Article 2 of the European Convention on Human Rights. Consequently, the ECHR awarded his family €32,000 in non-pecuniary damages.
The law on property rental in Cyprus appears to have been unfairly weighted in favour of tenants for some time, as defaulting tenants have been legally entitled to remain in a property without paying their legally due rent until the hearing of an application for recovery of possession before the Rent Control Court. However, the recent amendment of the Rent (Control) Law seeks to resolve the problem of landlords who have had to deal with such tenants.
The admiralty division of the Supreme Court recently issued a judgment confirming that a warrant of arrest may be issued only in in rem proceedings against a vessel itself. The case concerned a dispute of the company shareholders which owned the Cyprus-registered vessel Mediterranean Diamond. The sole defendant in the proceedings was the shipowning company.
The Shipping Deputy Ministry recently issued Circular 20/2020, notifying interested parties of the entry into force of the 2018 amendments to the Code of the Maritime Labour Convention 2006. The amendments will enter into force on 26 December 2020. In essence, the amendments aim to provide additional protection to seafarers in the event that they are held captive as a result of acts of piracy or armed robbery against ships.
The Shipping Deputy Ministry recently informed the registered owners, charterers, ship managers and representatives of Cyprus-flagged ships of a number of new circular letters issued by the International Maritime Organisation. All owners and managers of Cyprus-flagged ships are advised to take note and implement the measures contained in the circular letters and the interim advice for ship operators prepared at the request of the Directorate General for Health and Food Safety.
In order to support shipping companies and owners of Cyprus-flagged ships and mitigate the difficulties arising from the COVID-19 outbreak, the Shipping Deputy Ministry has extended the deadline for paying tonnage tax for Cyprus ships and the Register of Cyprus Ships annual maintenance fee to 31 May 2020. The ministry has also introduced special arrangements in order to protect public health and limit the spread of the virus.
The Shipping Deputy Ministry recently issued a circular on cyber risk which recognises the need to raise awareness of cyber-risk threats and vulnerabilities to support safe and secure shipping. 'Maritime cyber risk' refers to a measure of the extent to which a technology asset could be threatened by a potential circumstance or event, which may result in shipping-related operational, safety or security failures as a consequence of information or systems being corrupted, lost or compromised.