FBME Bank Liquidation Please be advised that the liquidation of FBME Bank in Cyprus and Tanzania has finally commenced. This is  extremely positive news  and provides clients maintaining deposits with FBME Bank the opportunity to submit their claims for payment. The claims process for depositors can be summarised as follows: Claims must be submitted to the liquidator of FBME Bank in Cyprus, by latest the 29 June 2024. In the case of Tanzania accounts, the deadline is 17th May 2024. Certain supporting documentation is required to prove depositor claims. In the case of Corporates, the company should be in good standing and not dissolved or struck-off the register. Once a claim form and supporting documentation is submitted to the liquidator, a strict Compliance procedure with regards to requisite depositor KYC and due diligence must be followed. A Power of Attorney can be granted in favour of a third-party professional adviser to assist and submit creditor claims on behalf of depositors. As a firm we are in a position to assist any of our clients with the  recovery of any funds currently held in FBME.   You can contact us directly at  info@pconstantinou.com   to commence to process as time is of the essence and you need to take immediate action.

Cyprus Double Tax treaties for the avoidance of Double Taxation with over 65 countries The following tables show the rates of withholding tax deducted from income, with countries that have signed a double taxation treaty with Cyprus. Notes for better understanding the Double Tax Treaties between the specific country and Cyprus: * 10% for royalties granted for use within the Republic. 5% on film/TV rights. ** The treaty is a Covered Tax Agreement for the purpose of the Multilateral Instrument (MLI) which entered into force for Cyprus on 1 May 2020. Cyprus has approved the minimum standards of BEPS Action 6 (Purpose of Covered Tax Agreement), Action 7 (Prevention of Treaty Abuse) and Action 14 (Making Dispute Resolution Mechanisms More Effective). The treaty is automatically amended to include these provisions. 15% if received by a company controlling less than 25% of the voting power. 5% if received by a company controlling more than or equal to 10% of the capital. 15% in all other cases. NIL if the beneficial owner is a company, other than a partnership, which holds directly at least 10% of the capital of the company paying the dividend. 15% in all other cases. 5% if the amount invested by the beneficial owner is not less than €200.000 irrespective of the percentage of voting power acquired. 10% if the recipient holds directly at least 25% of the share capital of the paying company. 15% in all other cases. 5% if received by a company controlling at least 10% of the voting power. 15% in all other cases. 5% if the beneficial owner is an insurance undertaking or pension fund, the Government or a political subdivision or a local authority, the Central Bank, or a company whose shares are listed on a registered stock exchange provided that no less than 15% of the voting shares are in free float and which holds directly at least 15% of the dividend paying company throughout a period of 365 days, that includes the day of the dividend payment. 15% in all other cases. 10% if received by a company controlling more than or equal to 10% of the capital. 15% in all other cases. NIL if paid to the Government of the other State. NIL if paid to the Government of the other State or in connection with the sale on credit of any industrial, commercial or scientific equipment or any merchandise by one enterprise to another or in relation to any form of loan granted by a bank or is guaranteed from the Government or other governmental organisation. NIL if paid to the Government of the other State, to a bank or a financial institution or in respect to debt obligations arising in connection with the sale of property or the provision of services. NIL on literary, dramatic, musical or artistic work with the exception of films used for television programs. 5% on film royalties (except films shown on TV). 10% on literary, musical, artistic work, films, TV royalties. NIL on literary, artistic or scientific work including films. 5% on royalty payments in respect of any copyright of scientific work, any patent, trademark, secret formula, process or information concerning industrial, commercial or scientific experience. 10% in all other cases. NIL if paid to the Government of the other State, a political subdivision or a local authority, the National Bank or any institution the capital of which is wholly owned by the State or a political subdivision or a local authority or in the form of interest income from bank deposits. 10% on interest received by financial institutions, on interest paid in connection with industrial, commercial, scientific equipment or the sale of merchandise between two companies. 10% on right to use industrial, commercial or scientific equipment or for information concerning industrial, commercial or scientific experience and 15% for patents, trademarks, designs, models, plans, secret formulas or processes. 5% if the dividend is received by a company owning directly at least 25% of the capital of the dividend paying company. 10% in all other cases. This rate does not apply, where 25% or more of the capital of the Cypriot resident is owned directly or indirectly by the Bulgarian resident paying the royalties and the Cyprus company pays less than the normal rate of tax. 5% is applicable if the dividend is received by a company owning at least 20% of the capital of the dividend-paying company and has invested in the acquisition of shares or other rights of the dividend-paying company of at least €100.000. 10% in all other cases. The treaty provides that the tax on the gross amount of the dividends shall not exceed that chargeable on the profits out of which the dividends are paid. 7% if paid to a bank or similar financial institution. NIL if paid to the Government. 15% if dividends are paid out of income derived from immovable property by certain investment vehicles. NIL if paid to or is guaranteed by the Government, statutory body, or the Central Bank. The additional Protocol signed on 8 September 2020 between Cyprus and Russia that amends the tax treaty is effective from 1 January 2021. The treaty between the Republic of Cyprus and the Socialist Federal Republic of Yugoslavia still applies. The treaty between Cyprus and the Czechoslovak Socialist Republic still applies. NIL if the beneficial owner is a company (other than a partnership) which holds directly at least 10% of the capital of the dividend-paying company for an uninterrupted period of not less than one year. 5% in all other cases. NIL if the beneficial owner is an insurance undertaking or pension fund, the Government or a political subdivision or a local authority, the Central Bank, or a bank or if it is paid in respect of government or corporate bonds or Eurobonds, all listed on a registered stock exchange. 5% if the beneficial owner is a company whose shares are listed on a registered stock exchange provided that no less than 15% of the voting shares are in free float and which holds directly at least 15% of the dividend-paying company throughout a period of 365 days, that includes the day of the dividend payment. 5% if the beneficial owner has invested in the capital of the company less than €150.000 at the time of the investment. NIL if paid to the Government, a local authority, or the Central Bank. NIL if the beneficial owner is a company (other than a partnership) which holds directly at least 10% of the capital of the company paying the dividends for an uninterrupted period of no less than 12 months. NIL if the beneficial owner is the other Contracting State or the Central Bank of that other State, or any national agency or any other agency (including a financial institution) owned or controlled by the Government of that other State. NIL if the beneficial owner is a pension fund or other similar institution providing pension schemes in which individuals may participate in order to secure retirement benefits, where such pension fund or other similar institution is established, recognised for tax purposes and controlled in accordance with the laws of that other State. 15% in all other cases. NIL if the dividend is received by a company (other than a partnership) holding at least 10% of the capital of the dividend-paying company. 5% in all other cases. NIL if the beneficial owner is a company (other than a partnership) which holds directly at least 10% of the capital of the dividend-paying company for an uninterrupted period of no less than 24 months. 5% in all other cases. 5% if the dividend is received by a company (other than a partnership) which controls directly at least 10% of the voting power in the dividend-paying company. 15% in all other cases. NIL if the beneficial owner is: a company (other than a partnership) the capital of which is wholly or partly divided into shares and which holds directly at least 10% of the capital of the dividend-paying company for an uninterrupted period of at least one year, or a pension fund or other similar institution recognised as such for tax purposes, or the Government, a political subdivision, local authority or Central Bank of one of the two contracting states. 15% in all other cases. 5% if the beneficial owner is a company (other than a partnership) which holds directly at least 10% of the capital of the dividend-paying company. 10% in all other cases. NIL if the beneficial owner is a company (other than a partnership) which holds directly at least 10% of the capital of the dividend-paying company. 5% in all other cases. 5% if the dividend is received by a company which holds at least 10% of the capital of the dividend-paying company. 10% in all other cases. NIL if the beneficial owner is a company (other than a partnership). 10% in all other cases. NIL if the beneficial owner is a company (other than a partnership). 5% in all other cases. NIL if the beneficial owner is a company which holds directly or indirectly at least 25% of the capital of the dividend-paying company. 5% in all other cases. 5% on royalties for the use of, or the right to use, industrial, commercial or scientific equipment. 8% in all other cases. 5% if the beneficial owner is a company (other than a partnership) which holds directly at least 20% of the capital of the dividend-paying company throughout a period of 365 days, that includes the day of the dividend payment. 10% in all other cases. 5% if the beneficial owner is a company which holds directly at least 10% of the capital of the dividend-paying company. 15% in all other cases. NIL if the beneficial owner is the Government of the other Contracting State, a political subdivision, a central or local authority, the Central Bank or any other financial institution wholly owned by the Government of the other Contracting State. 10% in all other cases. NIL if the beneficial owner is: a company that holds directly at least 5% of the capital of the company paying the dividends, throughout a period of 365 days, that includes the day of the dividend payment, or a recognised pension fund which is generally exempt under the Cyprus Income Tax Law. 15% in all other cases. NIL if interest is derived and beneficially owned by the government, political subdivision, local authority or the National Bank of the other contracting State.

Cyprus is considered a primary international business center amongst 50 countries, offering an ideal entrepreneurial environment and supporting facilities. The private limited company called International Business Company (IBC) is the most common type of company used by non-residents for international business activities. The following categories of IBC’s are currently operating on the island: Royalty, advertising & marketing, trusts, architecture & engineering holding, construction & drilling, invoicing, re-invoicing, magazines & newspapers, employment agency, real-estate & land development, leasing, shipping & ship-management, management, trading, captive insurance companies, sales, headquarters, foreign sales corporations (F.S.C’s) International Business Companies may be also formed for the purpose of management and control of any other company. Taxation of a Cyprus Company | Advantages of an IBC Corporation tax of 12.5% on net profits (one of the lowest in the EU) Existence of  double taxation treaties with over 65 countries Dividends have no withholding tax (unless the recipient is a Cyprus tax resident) No withholding tax on interest Profit from the disposal of shares, securities, etc. are tax exempt The annual capital allowance on fixed assets and all expenses incurred for the earning of income (with some restrictions and exceptions) are allowed as deductions No capital gains tax (except the disposal of immovable property in Cyprus) On the inheritance of shares of an IBC, no estate duty is payable No stamp duty payable on documents referring to ordinary daily activities For companies and their foreign employees, no exchange control regulations apply Expatriate employees, receiving their salary through Cyprus, do not pay income tax if working abroad.

Our team had a fantastic time at the Nugs Head Pub for lunch after work. The food was delicious, and we enjoyed great conversations, strengthening our bond outside the office. After lunch, we had fun playing billiards and darts, bringing out some friendly competition and lots of laughs. It was a wonderful opportunity to relax and connect as a team. Looking forward to more moments like this!

Today, our team enjoyed a wonderful after-work dinner together. It was a perfect opportunity to relax and connect outside the office. We shared plenty of laughs and great conversations, which helped strengthen our bond as a team. It was a delightful break from our daily routine and a chance to create nice moments together. Looking forward to more gatherings like this!

The Tax Department announces that, based on a Decree of the Council of Ministers dated 21st June 2024, 2023 (ΚΔΠ 209/2024), the submission of personal income tax returns (TD1 and TD1 self-employed) for the year 2023 and settlement of any taxes accrued  is extended until October 31st , 2024. Employees, Pensioners and Self-employed persons with a gross total income over 19,500 euros must submit an Individual Income Tax Declaration. Helpful information and material are posted on the website of the Tax Department at www.mof.gov.cy/tax for completing and submitting the form.

A heartwarming celebration unfolded as we gathered to honor our exceptional leader, the "Best Boss Ever," on the milestone of turning 60. More than just a professional guide, our boss is the cornerstone of our company, a mentor who cares deeply for each team member. The birthday festivities were a testament to the familial atmosphere he has cultivated within our workplace. Surrounded by colleagues who regard him as more than just a leader but as a father figure, the atmosphere was filled with genuine warmth and appreciation. The event was a fusion of heartfelt wishes, shared memories, and a recognition of the invaluable guidance he has provided over the years. As we celebrated this significant birthday, it became clear that our boss's influence extends far beyond the professional realm, creating a workplace family united by respect, admiration, and genuine affection. Cheers to our remarkable leader, the "Best Boss Ever," and to many more years of shared success and camaraderie!

Companies that expect to have taxable income for the year 2024 must pay the first instalment of the temporary (provisional) tax by the 31st of July 2024. The tax, calculated as 12.5% on the taxable income, is payable in two equal instalments, by the 31st of July and the 31st of December of 2024. Late filing of the return and payment of the tax will attract interest and penalties. The aim of payment of the provisional tax is to avoid a 10% “additional tax”. However, to achieve this, your estimated taxable income must be at least 75% of the final taxable income as it will be determined by your company’s audited financial statements. May we further remind you that you can revise this temporary assessment before the end of each calendar year. If you expect that your company will have taxable income for the year 2024, please contact Froso Chrysanthou using the email f.chrysanthou@pconstantinou.com by the 19th of July, 2024, to arrange the payment of the first instalment of the provisional tax. Finally, please note that the final instalment must be transferred by the 15th of December 2024. Do not hesitate to contact us directly should you require any further assistance about the 2024 Temporary tax first instalment.

Cyprus May 2024 – The Tax Department announced that the submission of the Individual Income Return for 2023 through the TaxisNet system has begun. Employees, Pensioners and Self-employed persons with a gross total income over 19,500 euros must submit an Individual Income Tax Declaration. The last date for submission of the Individual’s Income Declaration for 2023, and payment of the tax due, is 31st July 2024, and a requirement for the submission is the electronic registration in the TaxisNet system. Helpful information and material are posted on the website of the Tax Department at www.mof.gov.cy/tax for completing and submitting the form.

An electronic service launched by the Ministry of Finance to contribute to the partial replenishment of losses incurred in 2013 by natural and legal persons who had the characteristics of a "retail client", due to the implementation of resolution measures in the two systemic Banks (Bank of Cyprus and Popular Bank). A retail client is considered to be anybody who did not have the necessary knowledge to understand the risks involved in the management of their portfolio and had an impairment in 2013 of either deposits or securities. You can submit your application through the link below by the 30th of April 2024 Submit details to participate in the Replenishment Scheme - Participation in the National Solidarity Fund Scheme – gov.cy (service.gov.cy) We also note the following: Bank of Cyprus: For impairment of deposits and securities at the Bank of Cyprus, it is requested to fill in only any bank account number or Investor share code, without completing the amount that was impaired. Popular Bank: For impairment of deposits and securities at the Popular Bank, only information for amounts that were impaired is to be provided. You can contact us directly at info@pconstantinou.com for any queries you may have.

Cyprus Corporate tax rates – An easy to understand summary The Corporate income tax rate is 12.5%. Exemptions from corporation tax Dividend income Interest Income that does arise from ordinary activities or is closely connected to the ordinary activities of the company Profit from the disposal of securities. Deductions All expenses incurred wholly and exclusively for the production of income of the business are considered tax-deductible expenses. Non-deductible expenses The following are not deductible from income: Business entertainment expenses in excess of 1% of the gross income. (the amount of the expense is limited up to €17,086) Private (saloon) motor vehicle expenses Immovable property tax Interest payable or deemed to be payable in relation to the acquisition of a private motor vehicle, irrespective of whether it is used in the business or not, or other assets not used in the business. This restriction is lifted after 7 years from the date of purchase of the relevant asset Expenditures which is not supported by invoices or other supporting documentation. Losses Losses are carried forward indefinitely. As of 1 January, 2013 losses are carried forward for only five years from the end of the tax year in which the tax loss arises. Tax credit for foreign tax paid Any tax suffered abroad on income which is subject to income tax will be credited against any income tax payable on such income irrespective of the existence of a double tax treaty.

2023: Cyprus VAT (Value Added Tax) guide and information Value Added Tax (VAT) was introduced on 1 July 1992 and is imposed on the provision of goods and services as well as on the importation of goods. Compare VAT rates in Cyprus and view what rate applies for goods or services offered VAT RATES Standard rate VAT – 19% from 13 January 2014 Standard rate – 18% from 14 January 2013 Standard rate – 15% from 1 January 2003 (17% from 1 April 2012) Reduced rate VAT – 9% (8% up to 12 January 2014) Reduced rate – 8% from 1 January 2006 Reduced rate VAT – 5% from 1 July 2000 Zero rate VAT – 0% from 1 July 1992 Value Added Tax (VAT) Registration Registration is compulsory for business: If the value of the taxable supplies is in excess of €15,600 during the 12 preceding months At any time, if the expected turnover is in excess of €15,600 in a period of 30 days. Provides services to a VAT registered person within the European Union with nil registration threshold Businesses with an annual turnover of less than €15,600 have the option to register voluntarily. The standard rate of 19% The standard rate applies to the provision of all goods and services which are not subject to the zero rates, the reduced rate or are not exempt. Reduced rate of 9% The reduced rate of 9% applies to: All restaurant catering services (including the supply of alcoholic drinks, beer, wine, and soft drink). (Effective from 10 January 2011) Accommodation in hotels, tourist lodgments, and any other similar lodgments. (Effective from 1 January 2011) Transportation of passengers and their accompanying luggage within Cyprus using urban, intercity, water, and rural taxis and tourist and intercity buses. Reduced rate of 5% The reduced rate of 5% applies to: The supply of foodstuff and/or beverages (excluding alcoholic drinks, beer, wine, and soft drinks) or both, irrespective of whether the goods are delivered from the supplier to the customer or taken away by the customer. (Effective from 10 January 2011) The supply of pharmaceutical products. (Effective from 10 January 2011) Newspapers, books, and magazines Hairdressing services Entry fees to theaters, circus, festivals, Luna parks, concerts, museums, etc Entry fees at sports events and fees for using athletic centers Renovation and repair of private households after three years of the first residence Supply of catering services from school canteens. VAT: Zero rate The zero rate VAT applies to: The exportation of goods Repair, maintenance, chartering and hiring of sea-going vessels, which are used for navigation on the seas and carrying passengers for reward or used for the purpose of commercial, industrial or other activities Supply, modification, repair, maintenance, chartering and hiring of aircraft, used by airlines operating for reward mainly on international routes Supply of services to meet the direct needs of seagoing vessels and aircrafts Transportation of passengers from Cyprus to a place outside Cyprus and vice versa using a seagoing vessel or aircraft. Exempt supplies Rental of residential property Insurance services Financial services (with some exceptions) Hospital and medical caring services Postal services Disposal of immovable property where the application for building permission has been submitted prior to 1 May 2004. Penalties and interest For late registration – €85 for every month of delay Late submission of return – €51 for each return For late payment of VAT – 10% of the amount due plus 5% p.a. interest Late de-registration – €85 For late submission of Intrastat form – €15 for each return Late submission of VIES (VAT Information Exchange System) return – €50 for each return.