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.
The Cyprus Tax Department recently issued a circular giving guidance on the tax residence provisions for individuals introduced by Law 119(I)/2017. The circular makes clear that an individual who holds office as a director of a Cyprus tax-resident company and delegates this office to an alternate or nominee director at any time during the tax year does not qualify for Cyprus tax residence under the 60-day rule.
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 Ministry of Finance recently announced that the double tax agreement with Saudi Arabia – which was signed on 3 January 2018 – will enter into force on 1 March 2019. The agreement will apply to amounts paid or credited on or after 1 January 2020 with regard to taxes withheld at source and to tax years beginning on or after 1 January 2020 with regard to other taxes.
The Tax Department recently announced a time extension for banks and other financial institutions to submit their corporate tax returns for the 2017 tax year. Unlike other companies, which must submit their tax returns electronically, banks and other financial institutions must submit hard copy tax returns, giving additional details of their business, by the end of the year following the tax year in question.
The Supreme Court recently rejected an appeal against a detention order issued by the Larnaca Permanent Assize Court in a sexual assault case. The appellant claimed that the evidence placed before the first-instance court had speculated on his guilt and the risk of him absconding. However, the Supreme Court found that the accused's detention until trial was at the discretion of the first-instance court and that, based on the circumstances of the case, the court had exercised this power correctly.
The Larnaca District Court recently issued a decision on the validity of a sworn affidavit provided by a lawyer on behalf of his clients in the context of an interim application. Drawing on relevant case law, the court found that lawyers who are or will be witnesses in the relevant case or who represent clients in the relevant case cannot provide sworn affidavits as part of the court proceedings. As a result, the court rejected the claimant's objection for being invalid.
A recent Supreme Court decision examined a first-instance court's interpretation of the Civil Procedure Rules and, in particular, who can be added as a third party to a process pending before the courts. The decision established that the courts should look only at the conditions imposed by the Civil Procedure Rules on a prima facie basis and not the merits of the claim.
In a recent first-instance judgment, the Supreme Court of Cyprus examined the meaning of 'recognisance' under the Civil Procedure Law. The judgment indicates that the court has a tendency to follow both a more liberal approach reflecting the needs of modern commercial transactions and a teleological interpretation by focusing on the purpose of legislation instead of the ordinary meaning of the words.
The Supreme Court recently upheld a lower-court judgment to dismiss an application under the Civil Procedural Rules requesting enforcement measures 18-and-a-half years after an initial judgment had been handed down. However, the appeal was dismissed because the debt judgment's existence had not been established and because there had been such a long delay in applying for the adoption of the enforcement measures.
In an effort to minimise disruption to the shipping industry deriving from Brexit, the Shipping Deputy Ministry has undertaken a number of contingency measures. However, the ministry has emphasised that affected parties must also make their own preparations for the United Kingdom's withdrawal from the European Union and that where new authorisations, licences or certificates will be required post-Brexit, each party will be responsible for applying in good time.
The Deputy Ministry of Shipping recently updated its policy on the eligibility of ships to be registered under the Cyprus flag. The policy stipulates additional requirements beyond those set out in the Merchant Shipping Registration of Ships, Sales and Mortgages Law and should therefore be read in conjunction with the relevant legal provisions.
The admiralty jurisdiction of the Supreme Court recently ruled in a case concerning a marine accident which occurred when the bow of a sailing boat rammed the starboard side of a speedboat. It was highly disputed whether the sailing boat had been simultaneously using open sails and its engine. In reaching its conclusion, the court considered the evidence and the Rules of the Convention on the International Regulations for Preventing Collisions at Sea.
The Deputy Ministry of Shipping recently announced its decision to replace the International Safety Management Code Form and the International Ship and Port Facility Security Code Form with a new consolidated form in an effort to reduce paperwork and avoid the duplication of information. All interested entities are requested to use the new form to declare the particulars of companies or ships under the code and to comply with relevant circulars.
The Cyprus Flag Administration recently imposed additional requirements on the development, implementation and certification of safety management systems over and above those which have been set out in the International Safety Management Code since 1998. The consolidated edition of the additional requirements replaces a previous version published in 2006 and recognised organisations are required to implement its terms and conditions immediately.