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AMENDMENTS TO THE GOVERNMENT BOND YIELD REFERENCE RATE- USED FOR NOTIONAL INTEREST DEDUCTION

The Cyprus Tax Department recently announced, on 31 December 2016, that the ten-year government bond yield rate of the below listed countries, has increased by 3%.

As stated by the Tax Department, their “reference rate” for the purposes of granting tax allowance on new capital, as per article 9B of the Income Tax Law N.118(I)/2002, as amended from time to time, is as follows and this will be the basis used  for notional interest deductions in the 2017 tax year:

CountryBond Yield RateRef. rate for 2017
Cyprus3.489%6.489%
Czech Republic0.414%3.414%
Germany0.204%3.204%
India6.878%9.878%
Latvia0.894%3.894%
Poland3.627%6.627%
Romania3.748%6.748%
Russia

(denominated in US dollars)

8.380%

4.409%

11.380%

7.409%

Ukraine8.705%11.705%
United Arab Emirates3.326%6.326%
United Kingdom1.326%4.326%

Savva & Associates have significant experience in providing comprehensive Cyprus tax planning and can offer advice regarding company and investment structures and trusts. We can also offer clients high-level EU VAT/VIES advice that ensure that all our client companies are fully compliant with EU and Cypriot VAT laws.

For a free initial consultation and to discuss your particular circumstances with our experts please contact Mr. Charles Savva at [email protected]