Useful Information

Cyprus has amended the Income Tax Law and the amendments will be implemented as from 31 December 2022.

1. Additional Cyprus corporate tax residency test

Currently only companies that are “managed and controlled” from Cyprus are considered tax residents of Cyprus as per the Income Tax Law (ITL). The new amendment does not change this rule.

The change relates to companies incorporated  or registered in Cyprus and “managed and controlled” from outside of Cyprus. With the amendment they will also be considered tax resident in Cyprus provided they are not tax residents of any other jurisdiction.

The amendment eliminates the possibility for a Cyprus incorporated/registered company to be considered non-tax resident in Cyprus, whilst not being tax resident in any other jurisdiction. The change does not affect our clients as their companies are all tax resident in Cyprus.

2. Withholding tax is introduced for payments to companies in EU blacklisted jurisdictions.

Up to now any outbound payment of dividend, interest and royalty payment made by a Cyprus tax resident company to a recipient in a foreign jurisdiction was not subject to withholding tax (WHT) deductions in Cyprus.

With the amendment of the ITL a Withholding tax (WHT) will be introduced when the direct recipient of the dividends, interest and royalties is a company registered or tax resident in an EU-blacklisted jurisdiction.

A WHT of 17% (Special Defence Contribution) is introduced for dividends paid by Cyprus tax resident companies to companies in EU blacklisted jurisdiction where the direct recipient holds directly more than 50% of the capital, votes or entitlement to profit.

A WHT of 10% on royalties and a WHT of 30% for passive interest payments is further introduced for payments to companies in EU blacklisted jurisdictions.

The EU black list consists of American Samoa, Fiji, Guam, Palau, Panama, Samoa, Trinidad and Tobago, US Virgin Islands and Vanuatu so the above change does not affect our clients with shareholders that are mainly resident in EU countries.

Ultimate Beneficial Owner register is being implemented in Cyprus

Cyprus is implementing a register of Ultimate Beneficial Owners (UBOs) as required by the European Union’s Fourth Anti-Money Laundering Directive. The Directive requires every EU member state to implement a central register containing details of the UBOs of companies and other legal entities. The purpose is to enhance transparency in order to prevent money laundering and terrorist financing.

It is the Registrar of Companies that will keep the register and the companies have up to the 16^th of September 2021 to submit the information of the UBOs.  

The UBO register will contain name, date of birth, nationality, passport number, address, nature and percentage of beneficial ownership and when she/he became a UBO. Nordic Finance will in accordance with the above be obliged to provide the Registrar of Companies with the UBO information for all of the companies under its administration.

Cyprus is an interesting alternative for moving abroad

Many people choose to move to Portugal, Italy or Spain due to a pleasant climate and favorable tax rules. Cyprus is also an interesting alternative that not many people know about. If you settle in Cyprus and become a so-called non-domiciled, then dividend income, interest income and capital gains are tax-free.

Cyprus has around 300 days of sunshine a year and you can play golf or walk along the Mediterranean all year round.

Read more about the benefits of our brochure – Cyprus tax incentives for high net worth individuals.

Happy Midsummer!

Nordic Finance extends its license with CySec

We are delighted to announce that as from 9^th of June 2020, Nordic Finance has been granted an extended license by Cyprus Securities and Exchange Commission (CySec), which allow Nordic Finance to assist with the formation and administration of International Trusts, Funds and Partnerships as a complement to existing corporate and financial structures. The company will also be able to offer administration of clients’ funds.

Corona virus

Given the recent development of the Covid-19 we would like to ensure you that we continue to service our customers from the office. We have updated our business contingency practice and we are taking all the necessary precautions to stay safe. We have procedures in place to work from home if it should become necessary. 

Cyprus is taking all necessary precautions to limit the spread of the virus, which means that government offices like the tax office and the registrar of companies have limited their services to those that can be performed online and the post office has closed its service to the public so there is no incoming or outing mail for the time being. 

Please know that you can contact us via phone or email if you should have any inquiries.