Category: Uncategorized



Wheat
06/12/2021

Benefits in Kind – Social Security Contributions Treatment

in 2021, Social Insurance, Uncategorized

In reference to the treatment of the various benefits in kind that an employee may enjoy, the Ministry Labour, Welfare and Social Insurance have clarified the taxable treatment of the following scenarios.  

View detailed list here.

For any further clarifications please do not hesitate to contact our Head of Accounting Department, Mrs Despina Demosthenous at despo@ayca.com.cy.

Kid hugging a dog
18/10/2021

Cyprus Headquartering – Government Action Plan

in 2021, Investment, Uncategorized

Cyprus Headquartering – Government Action Plan

The Ministry of Finance has announced the following measures as part of the action plan to enhance Head Quartering in Cyprus, attract foreign investment and or enhance business activity in Cyprus.

  1. Extension of the tax deduction period benefit for those employees that were not Cypriot residents in a prior period of 17 years before their commencement of their employment to Cyprus
  • 50% tax deduction for those new residents/employees with a minimum annual salary of €55,000
    • The current beneficiaries with Salaries over €100Κ can extend their right from 10 to 17 years
    • The employees that have a Salary from €55Κ-€100Κ can benefit for a period of 17 years.
  • New policy for employment from 3rd countries

The companies that are:

  • operating in Cyprus and are of foreign interest/shareholding and maintain fully fledged offices
  • Cyprus Shipping companies
  • Cyprus Companies involved in innovation and technology
  • Cyprus pharmaceutical Companies or Companies that operate in the fields of biogenetics or biotechnology

Can recruit from 3rd countries if the following criteria are met:

  • Minimum monthly gross Salary €2500
  • The candidate must hold a university degree or equivalent, or has a minimum 2 years’ experience
  • Minimum 2 years contract
  • The Company can employee up to a max of 70% from 3rd countries (the limitation applies for a period of 5 years)
  • The work permits will be issued within one month period and will be valid for 3 years.
  • A work permit can also be granted to the spouse/husband of the eligible individual that obtains visa with this scheme.

Can recruit support staff from 3rd countries with a gross salary lower than €2500 as long as the following criteria are met:

  • The Company can employee up to a max of 70% from 3rd countries (the limitation applies for a period of 5 years)
  • The work permits will be issued within one month period and will be valid for 3 years.
  • DIGITAL NOMAD VISA (with a max number of 100)
  • Who can benefit?

Citizens of 3rd countries self-employed/freelancers or employees that are working remotely for employers/customers that are located outside Cyprus, for a 12-month period.

  • Residency status
  • Have the right to stay in the country for a year with option to renew for another 2 more years.
  • Their family has the right to stay in Cyprus but not the permit to work.
  • If they stay in Cyprus for more than 183 days and are not tax residents of any other country will be considered as tax residents of Cyprus.
  • Prerequisites:

The visa is provided if the following requirements are met:

  • A written declaration is filed that confirms that their services/work is not provided to a local Cyprus Company
  • There is a signed contract of employment and or engagement letter with an overseas Company or physical person or any other proof of work for the duration of the period that the visa is granted
  • The applicant can prove that he or she will have a minimum monthly income of EUR3.500. The amount is increased by 20% in case they have a wife/husband/partner and another 10% per child
  • They have a medical insurance and a clean criminal record
  • A 50% tax deduction on investments to innovative Companies both by a Cypriot Tax resident physical person or Company
  • A 120% capital allowance on expenses that relate to R&D
  • Citizenships

An employee that completes 5 years of residency and employment in Cyprus or 4 years and carry a certification of Greek language, can apply for a citizenship.

2020 changes tax
12/12/2019

Tax Update – December 2019

in Uncategorized

We would like to inform you of the below important changes in relation to Social Security and National Health System (GESY) contributions and the personal income Tax:

Social Security contributions

As from 1st January 2020 the monthly maximum insurable gross salary in respect the Social Security contributions will increase to €4.572

GESY-National Health System

As from 1st March 2020 the GESY-National Health System will increase to:

Categories March 2020
Employees 2,65%
Pensioners 2,65%
Other Income e.g. interest, dividends, rental income 2,65%
Directors 2,65%
Self Employed 4,00%
Employers 2,90%

The maximum taxable amount per individual remains at €180.000

Personal Income Tax

The House of Parliament, on the 6th of December 2019, approved an increase in the percentage of maximum allowable tax deductions in relation to life insurance, medical insurance, social security, pension fund, and provident fund contributions from 1/6 of gross income that was applicable up to 31 December 2018 to 1/5 of gross income.

The above is applicable from the 1st January 2019 (tax year 2019) onwards.

Finance
23/02/2017

Group Financing

in Uncategorized

Cyprus Tax Authorities have announced the intention that minimum margin scheme for Group financing will be abolished on 1 July 2017. Current regime was regulated according to the correspondence between the commissioner of Tax Department and the Taxation Committee of ICPAC dated 4 July 2011. According to the current legislation, minimum accepted margins for intra-group financing range between 0.125% – 0.35%

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Intellectual Properly
18/07/2016

Amendments to the IP Box regime in Cyprus

in Uncategorized

A. Introduction

The Cypriot Government has presented to the House of Representatives this week amendments to the income tax laws in order to bring the Cypriot legislation on the taxation of the income from the exploitation or sale of intangible assets, in line with the provisions of the OECD BEPS Action 5 and within the new EU rules on the subject.

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