The Cyprus Parliament has voted on Thursday 12 July 2013 a number of amendments to the Laws in an attempt to comply with the Cyprus Memorandum requirements.
The most significant tax laws voted are the following:
- Immovable property tax
The tax deadline for payment of the immovable property tax relating to year 2013 has been moved from 30 September 2013 to 15 November 2013.
It is worth noting that the immovable property tax is calculated based on the new tax bands and rates applying as from 1 January 2013. The basis for calculation of the tax is the value of the property as at 1 January 1980 as this is valued by the Land Registry Department.
- Offsetting amounts due and from the Government
The Cyprus Parliament has voted a Law whereby any amounts due to the Government can be set off with any refundable amounts owed to the taxpayers by the Government. The relevant offsetting will be made by the Treasury of the Republic before proceeding with the refunding of any amounts to the taxpayers. However, any offset will only be made for amounts already considered final and only after they have exhausted all the necessary procedures for their identification and collection.
- Special tax on credit institutions
The special tax imposed on credit institutions’ deposits is increased from 0,11% to 0,15%.
The tax deadline for payment of the relevant tax continues to be on the end of each quarter of the year with a percentage of 0, 0375% on the total deposits of the credit institutions as at the end of the previous quarter.
- Supervision of Cooperative Credit Institutions
The Cyprus Parliament proceeded to vote the Law for oversight of Cooperative Credit Institutions by the Central Bank in respect of compliance with the Memorandum. At this stage, the Central Bank will essentially have the power to issue binding instructions to the Department of Supervision of Cooperative Institutions for intervention and supervisory measures to Cooperative Credit Institutions. At a later stage a new Law will be submitted for voting to the House of Representatives whereby full transfer of all powers of the Cooperative Credit Institutions will pass to the Central Bank of Cyprus.
For the VAT periods directly affected by the closure of banks and freezing of bank deposits on 15 March 2013 the additional penalties are abolished. This means that for the VAT periods ending on 28 February 2013, 31 March 2013 and 30 April 2013 any additional penalties are abolished provided that the taxpayers will pay the relevant VAT due and file the relevant vat declaration form no later than 10 December 2013.
The additional tax charged for failing to pay the due vat on time, is reduced from 10% to 5%. The relevant change relates to vat periods ending on 30 June 2013, 31July 2013, 31August 2013 and 30September 2013 provided that the taxpayers will pay the relevant VAT due and file the relevant vat declaration form no later than 10 December 2013.
- Tax credit for hiring unemployed personnel
A tax credit equal to 25% of the taxable income will be granted to employers employing employees who are registered in the lists of the unemployed people.
Do not hesitate to contact our tax department for any queries you may have.