Law 39(I) of 2018 amended the VAT Law to make VAT chargeable on the transfer of the effective right to dispose of real estate or immovable property as owner. With effect from 1 January 2019 a long-term assignment of the right of ownership of immovable property (long-term lease), or the transfer of such a right is deemed to be a taxable supply of goods subject to VAT at the standard rate or at a reduced rate of 5% depending [...]
Non-performing exposures (NPEs) in the Cyprus banking system dropped to €11.02 billion in September 2018 marking a €5.6 billion reduction since end-June 2018 as Hellenic Bank acquired the performing part of the state-owned Cyprus Cooperative Bank, which has been converted to an asset management company.
According to data released by the Central Bank of Cyprus, total NPEs dropped from €16.6 billion in end-June to €11.02 billion marking the lowest level since the 2013 financial crisis. From the beginning of 2018 NPEs [...]
CESMA Guidelines under MiFID II
The Cyprus Securities and Exchange Commission (“CySEC”) has notified Cyprus Investment Firms, of the guidelines published by the European Securities and Markets Authority on 2 October 2017 under Directive 2014/65/EU (“MiFID II”) and Regulation (EU) No 600/2014 (“MIFIR”).
The guidelines apply solely in relation to synchronisation of business clocks pursuant to article 50 of MiFID II and recording of orders and submission of transaction reports pursuant to articles 25 and 26 of MIFIR. They are designed to [...]
Recognition, Registration and Enforcement of Court Judgments issued by EU Member States’ Courts
A judgment given in one EU country is to be recognised in any other EU country. Cyprus is a member of the EU and as such all EU enforcement procedures apply.
“Judgment” means any judgment given by a court or tribunal of an EU country, whatever the judgment may be called, including a decree, order, decision or writ of execution It does not include arbitration decisions. In enforcing a [...]
The EU Economic and Financial Affairs Council, which is made up of the economics and finance ministers of all member states, has approved the EU Commission’s recommendations on a unified EU list of non-cooperative jurisdictions in taxation matters, more familiarly referred to as a blacklist.
Inclusion in the list is based on three sets of agreed criteria regarding tax transparency, fairness of taxation and implementation of anti-base erosion and profit shifting measures. The list is intended to be continuously reviewed [...]
A comprehensive definition of "trusts" under Cyprus law does not exist. However, the court, through case law, has deemed that a trust arrangement is a structure whereby the holder of a property (the "trustee") has an obligation to manage that property for the benefit of another (the “beneficiary”).
The trust is created by transferring the legal ownership of the trust property from the previous owner (the “settlor”) to the trustee, though the beneficial ownership over that asset belongs to the [...]
Cyprus as Member State of the European Union has developed into an ideal destination for doing business for foreign enterprises and individual investors who wish to take advantage of the suitability of the Cyprus legal entities.
When it comes to business through Cyprus, investors and businessmen have the option of using one of the following legal entities:
• a limited liability Company
• a partnership
• a branch of a foreign Company
A Cyprus Company is one of the most popular and effective method [...]
The new reciprocal Cyprus-India agreement on merchant shipping between Cyprus and India entered into force on 29 November 2017, replacing an earlier agreement dated 11 February 1997. The most significant provisions of the new agreement are summarised below.
Each country will treat the other country’s vessels in the same way as it treats its own vessels engaged in international voyages in respect of free access to ports, use of ports for loading and unloading of cargoes and for embarking and [...]
The Parliament of Cyprus has approved on the 14th of July 2017 a bill which grants tax residence status to persons who have spent at least 60 days in Cyprus per year (effective as from the 1st of January 2017) provided that the following conditions are met:
Conditions to be fulfilled
(i) Remains in the Republic of Cyprus for at least 60 days during the tax year in question and
(ii) Is not a tax resident in another state and
(iii) Does [...]
The Bank of Cyprus announced the establishment of a real estate fund which will be the first of its kind in Cyprus.
The fund will be regulated by CySEC and will be listed on the Cyprus Stock Exchange. The 190 Million Euros fund will be classified as an Alternative Investment Fund and will seek to obtain a diversified portfolio of high quality income yielding commercial real estate property. The properties offer a gross average rental yield of over 6% per [...]
The Cyprus Tax Department has issued guidance to professional bodies and other potential stakeholders about VAT registration issues and procedures affecting insolvency office-holders in companies in receivership, liquidation or other insolvency proceedings, taking account of the prohibition in the Insolvency Advisers Law of 2015 against companies acting as insolvency practitioners, and the fact that many licensed insolvency practitioners are employees of professional service firms rather than independent contractors.
Cysec proposed Reforms of Investment firms
The Cyprus Securities and Exchange Commission (“CySEC”) has published a consultation paper (CP 2017-01) setting out proposed reforms to the regulatory framework governing the provision of investment services in binary options by Cyprus Investment Firms (“CIFs”). The full text of the consultation paper is available on the CySEC website here .
According to CySEC, the proposed reforms aim to enhance the nature, characteristics and trading methodology of binary options offered to retail investors. New proposed standards [...]
Parents have the obligation to support their child jointly and according to their powers. (article 33 Law No.216/1990). A parent or the Director of the Social Welfare Services may apply to the Court for maintenance, payable to the child (article 36 Law No.216/1990).
According to article 37 of the Law, the amount of maintenance is calculated according to the needs of the child taking into consideration the standard of living before the separation and the income generated by the parents.
According to article 5 (1)a of the Relationships between parents and children law 1990 (216/1990), the exercise of the parental care is considered both as duty and as right of the parents who exercise it together.
Parental Care includes the determination of the name, the custody of the person, the administration of property and representation of the child in any matter or legal transaction relating to him/her or his property. (article 5 (1) b law 1990 (216/1990).
(2) Where [...]
On 18 January 2017, EC Regulation No.655/2014 establishing the ‘European Account Preservation Order’ ("EAPO") came into force. The Regulation introduced a new procedure to facilitate cross-border debt recovery in civil and commercial matters by providing common rules in all European Union Member States relating to jurisdiction, issuance and enforcement of EAPO by national courts and authorities, as well as the measures available to debtors following the issuance of such an order.
The EAPO procedure allows for a single order to [...]
On 27 January 2017, the Cyprus House of Representatives passed legislation affording people the opportunity to repay overdue taxes in monthly instalments.
The law concerns debts to:
- immovable property,
- income tax,
- temporary defence contribution,
- capital gains tax,
- inheritance tax,
- stamp duty, and
- the temporary contribution in the public and private sectors.
In particular, overdue taxes under EUR 100,000 can be paid in 54 monthly instalments, whereas those exceeding EUR 100,000 can be paid in 60 monthly instalments.
The law also allows the tax commissioner the authority to decide on discounts, [...]
The Cyprus parliament has passed a law amending the Income Tax Law to bring its provisions on taxation of income from the use or sale of intangible assets into line with the “modified nexus” approach.
This approach, which was agreed by G20 leaders towards the end of 2014 and adopted by the OECD and the EU, allows a taxpayer to benefit from an intellectual property taxation regime, commonly known as an IP box, only to the extent that it can [...]
Permanent Residency in Cyprus for non-E.U nationals
There has been a recent increase in the interest of third country nationals obtaining immigration permits in the Republic of Cyprus, as Cyprus is a popular and very appealing destination for third country nationals who would like to obtain a Permanent Residency Permit in an EU country.
Non-EU nationals wishing to reside permanently in Cyprus can do so by applying for an Immigration Permit. This Permit is granted for an indefinite duration to non-EU [...]
Divorce is one of the most popular areas of Family Law. According to the statistical service’s demographic report 1 in 4 marriages in Cyprus will end in divorce. The only requirement for a divorce to be dealt with by the Cypriot Courts, is for either of the spouses to have lived in the Republic of Cyprus for at least three months, prior of filing the divorce application. Nationality of the spouses is not a relevant factor.
The first matter to [...]
The new Legislation
A. Title Deeds
The Cypriot Parliament has recently enacted new legislation with regards to the transfer and issue of separate title deeds of immovable properties purchased in Cyprus and the avoidance or reduction in the payment of transfer fees for the said properties.
The law applies to all cases where a contract of sale to purchase a property was deposited at the relevant District Land Registry Office on or before 31st December 2014. However, buyers who failed to deposit [...]