TaxLegi 22.3.2023
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Cyprus Tax Authoritypublishes 10-year government bond yield rates for NID purposes
Executive summary
On 16 March 2023, the Cypriot Tax Department issued an announcement that lists the 10-year government bond yield rates as of 31 December 2022 for a number of countries (listed in the table below) with respect to the Notional Interest Deduction (NID) on equity. These yield rates should be used to determine the reference interest rate forclaiming NID for the 2023 tax year. The key NID provisions and the applicability of the 10-year government bond yield rates are summarized below.
Notional Interest Deduction
As of 1 January 2015, Cyprus tax-resident companies (as well as foreign companies with permanent establishments in Cyprus) that carry on a business are entitled to claim a NID on their equity capital introduced on or after 1 January 2015. The NID is deducted from the company’s taxable income for the relevant tax year (subject to any restrictions) for the period of time during which the company used the equity in carrying on its activities. The NID is subject to a number of conditions, including a taxable-income limitation. The NID equals the multiple of the “reference interest rate” (as defined below) and “newequity.’’ “Reference interest rate” means the 10-year government bond yield of the country in which the newequity is invested, as of 31 December of the year preceding the tax year, increased by 5%.10-year government bond yield rates as of 31 December 2022 (applicable for 2023 tax year)i
Country
Yield rate
Country
Yield rate
Abu Dhabi
4.224
Jordan (US$)
7.930
Albania
6.244
Kazakhstan (€)
4.276
Argentina
6.447
Kazakhstan (US$)
4.555
Armenia
11.980
Kenya
13.880
Australia
4.050
Latvia
3.688
Austria
3.170
Lebanon
N/A*
Azerbaijan
5.727
Lithuania
3.660
Belarus (US$)
25.593
Luxembourg
3.075
Belgium
3.171
Mauritius
5.880
Bermuda (US$)
5.043
Morocco
3.947
British Virgin Islands
N/A*
Netherlands
2.906
Bulgaria
5.516
Nigeria
13.437
Canada
3.298
Nigeria (€)
N/A*
Cayman Islands
N/A*
Norway
3.192
Chile
5.266
Panama (US$)
5.754
Chile (US$)
5.210
Poland
6.846
Chile (€)
3.889
Portugal
3.579
China
2.883
Romania
8.282
Costa Rica
9.667
Russia
11.230
Croatia
3.894
Russia (US$)
N/A*
Cyprus
4.399
Saudi Arabia
3.135
Czech Republic
5.015
Serbia
7.036
Denmark
2.785
Singapore
3.102
Dubai (€)
N/A*
Slovakia
3.697
Dubai (US$)
4.377
Slovenia
3.781
Egypt
19.348
South Africa
10.788
Egypt (US$)
12.349
Spain
3.649
Estonia
3.637
Sweden
2.340
Finland
3.117
Switzerland
1.601
France
3.106
Taiwan
1.325
Germany
2.542
United States
3.877
Guernsey
N/A*
Ukraine
N/A*
Ghana
39.930
Ukraine (€)
32.023
Ghana (US$)
25.868
Ukraine (US$)
34.410
Greece
4.466
United Arab Emirates
N/A*
Hong Kong
3.677
United Kingdom
3.665
Hungary
9.051
Vietnam
4.784
India
7.331
Ireland
3.076
Isle of Man
4.650
Israel
3.580
Israel (US$)
4.650
Italy
4.560
Ivory Coast
N/A*
Jamaica
6.436
* There are currently no government bond yield rates for the above indicated countries.
Endnotes
1 The Cypriot Tax Department updates the list during the year. As such, it is advisable to check their website for announcements of new additions to the list. Please visit: Tax Department | Announcements (mof.gov.cy)
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The new Single Tax Administration Portal – Tax For All (TFA) goes live in March 2023
The existing TAXISnet system will be gradually replaced by the new online Tax Administration Portal Tax For All (TFA) in March 2023. The Cyprus Tax Department in its latest alerts has announced that the new portal will go live on 27 March 2023. For the smooth transition to the new TFA portal, the following updates with regards to deadlines and payments were communicated:
VAT Submissions• March 16, 2023 is the last day where VAT registered persons (businesses/ individuals) are allowed to submit VAT returns, VIES forms and VAT refund requests and/or update their email address through the TAXISnet system.
• As from March 27 2023 all VAT and VIES obligations (including special taxi and farmers schemes) will be processed exclusively through the TFA portal. The Intrastat Returns will continue to be submitted through the TAXISnet system.
VAT Payments
• March 16 2023 is the last day where payments of any VAT liabilities can be facilitated via the use of TAXISnet slips and reference codes.
• As from March 27 2023 all payments will be facilitated through the reference codes and slips provided by TFA portal. Payments can be concluded via the use of credit/debit card or through Commercial Banks, either with Internet Banking or at Banks cash desks.
Extension of VAT Returns deadlines• The deadlines of VAT return submissions due on
o April 10 2023 (covering the period December 2022- February 2022) are expected to be extended to April 26 2023.
o May 10 2023 (covering the period January 2023- March 2023) are expected be extended to May 26 2023.
More information regarding the new TFA operation, guidance and trainings
can be found in the Tax Department’s YouTube Channel
- George Liasis , Partner, Indirect Tax Services
- Georgios Pitsillis , Director, Indirect Tax Services
- Maria Raspa , Senior Manager, Indirect Tax Services
- Elpida Papachristodoulou , Senior Manager, Indirect Tax Services
- Iacovos Kefalas , Senior Manager, Indirect Tax Services
- Simos Simou , Senior Manager, Indirect Tax & Controversy
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New announcements for the practical implementation of the new Tax For All (TFA) portal
Following our latest Tax Alert dated 15/03/2023 in relation to the new online Tax Administration Portal “Tax For All” (TFA), the following announcements were released by the Cyprus Tax Department on 24/03/2023. In particular:
Deadline extension for the submission of VIES, VAT returns and payment of VAT due
· The deadlines for the submission of the VAT return forms as well as the deadline for the payment of VAT due for:
o the period December 2022 - February 2023, will be extended to 26 April 2023 (previously 10 April 2023),
o the period January 2023 - March 2023, will be extended to 26 May 2023 (previously 10 May 2023).
· The deadline for the submission of the VIES return covering the month of March 2023 will be extended to 26 April 2023 (previously 15 April 2023).
VAT Payments
Following the go live of the new TFA platform, all payments relating to VAT due will only be performed through the new TFA platform via any of the below payment methods:
o using a debit/credit card;
o through commercial Banks either with Internet Banking or at Bank cash desks using the new payment reference codes that will be available in the new TFA system.
· It is clarified that as from 27 March 2023, all existing VAT payment forms as well as all existing VAT payment reference codes are abolished and therefore, for the successful execution of payments, all taxpayers should use the new payment methods as well as the new payment reference codes as these are found in the TFA platform.
Activation of TFA account
· As from 27 March 2023, the Cyprus Tax Department has initiated the process of sending emails to all VAT registered taxpayers (i.e. to their registered email address as per the TAXISnet system) for the effective activation of their new TFA account;
§ In case where the respective email is not received by 6 April 2023, we are at your disposal to assist on the matter and ensure the smooth transition and activation of TFA account.
More information regarding the new TFA operation, guidance and trainings can be found in the Tax Department’s YouTube Channel and TFA website.
- George Liasis, Partner, Indirect Tax Services
- Georgios Pitsillis, Director, Indirect Tax Services
- Maria Raspa, Senior Manager, Indirect Tax Services
- Elpida Papachristodoulou, Senior Manager, Indirect Tax Services
- Iacovos Kefalas, Senior Manager, Indirect Tax Services
- Simos Simou, Senior Manager, Indirect Tax & Controversy