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Cyprus

Batch of tax reforms approved by House

The House on Thursday approved most of a batch of tax reform bills, aimed at streamlining taxation and encouraging investment.

The changes bring about a reduction of transfer fees on real estate transactions by 50 per cent until the end of 2016.

Another provision exempts from capital gains tax the sale of land with a construction on it, provided the land was acquired between the entry into force of this law and December 31, 2016.

Persons selling property that was acquired through foreclosure proceedings are not exempt from capital gains tax.

The updated legislation extends the duration of the period for tax relaxations (up to 50 per cent of the income) for persons who were non-residents of Cyprus prior to their employment here, and where their income is over €100,000 a year.

There are also deductions in fresh capital for businesses, and an extension of a capital discount / depreciation for machinery, installations and buildings by the end of 2016.

At the same time, a new status of a “non domicile” is introduced aiming to attract business executives and people of high income to Cyprus, exempting such persons from paying certain tax obligations.

Tax residents of the Republic and are domiciled here will need to pay the special defence contribution.

 

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