TaxLegi 22.3.2023

22 Mar 2023
Subject Tax Alert
Categories TaxLegi
  • 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)
     

     

  • 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
     

  • 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.