Legal

Published on Wednesday, 08 May 2013 12:50

REGULATION 6(2) OF THE ALIENS AND IMMIGRATION REGULATIONS
We would like to inform you that yesterday, 7th May 2013, the Ministry of Interior issued a decision regarding the fast track procedure of obtaining permanent residence in Cyprus (regulation 6).
New provisions:

Paragraph 2.4:

It is possible to buy two properties:

  1. House (or apartment) + house (or apartment)
  2. House (or apartment) + shop up to 100 m2
  3. House (or apartment) + office up to 250 m2

Conditions:

  1. Total purchase price is more than 300,000 euro (without VAT)
  2. Both of properties must be new, resale is not accepted from 7/5/2013
  3. If two properties are separate they must be purchased from the same developer

Note:

All conditions are valid for the couple. It will not be accepted purchase of more than two properties by the couple (including purchase by the Company)

ADULT CHILDREN:

Dependent Adult Children Age 18- 25:

Paragraph 2.5

Application fast track procedure (regulation 6) may be submitted by the adult child. He will get his permit till 25 years of age. After 25 he will have to make his own application for PR as independent person.

Conditions:

  1. Age 18-25
  2. To be dependent on the parents
  3. To provide proof of his studies
  4. Parents must prove additional 5,000 euro of income for each dependent adult child
  5. Adult child provides all documents required in the list (will be published shortly)

Independent Adult Children:

Paragraph 2.6

Conditions:

  1. Age 18 and more
  2. To be independent on their parents
  3. Total purchase price of the property of their parents must be 300,000 Euro (without VAT) for each independent adult child
  4. It must be proved payment of 66% of the total purchase price of the property of their parents
  5. All other requirements (bank deposit, etc) must be completed

 

COMPANIES:

 

Paragraph 2.3

The property could be purchased in the name of the Company.

Conditions:

  1. Company must be registered in Cyprus
  2. Applicant or his spouse (or both) must be shareholders and his/their name/ names should appear in the certificate of the shareholders of the Company
  3. They must be only shareholders of this Company

Note:

If the shareholder of this Company is another Company, it should be proved that only shareholder of that Company is the applicant (his spouse or both)

 

Paragraph 3:

Income from dividends in Cyprus Company of the applicants shall not be considered as a violation of the requirement of not engaging in any professional activity in Cyprus

 

APPLICATION (REG 6):

Paragraph 6:

It should be approved and PR should be granted provided that:

  1. All requirements are satisfied
  2. There are no reason of rejection because of their criminal record (after the research of the Ministry of Interior) or public order

 

For further information, please contact:

Elena Oratis

Advocate

(+357) 25 50 80 57

eoratis@aretilaw.com

Granting of the Cyprus citizenship by Registration in virtue of a legal marriage with a Cypriot (Type M125)

Published on Friday, 12 April 2013 12:07

OBTAINING THE CYPRUS CITIZENSHIP BY LEGAL SPOUSES OF CYPRIOT NATIONALS

 

  • The Civil Registry and Migration Department of the Ministry of Interior informs the foreign national spouses of Cypriot citizens who wish to apply for acquisition of Cypriot citizenship, that according to the relevant legislation and specifically the second exemption provided by subsection (2) of Article 110 of the Civil Registry Law 141 (I) 2002-2011 and the relevant case law of the Supreme Court of Justice, the granting of Cypriot citizenship by Registration(Type M125) is not allowed to foreign national spouses of Cypriot citizens who entered and / or remained illegally in the Republic, for any period of time.

 

  • In relation to the above, the Civil Registry and Migration Department advises the foreign national spouses of Cypriots who have illegally entered and / or stayed in the Republic regardless of any duration, to apply for acquisition of Cypriot citizenship by Naturalization (Type M127) at the Civil Registry and Migration Department or at the local District Administration offices provided that they fulfill the criteria determined by the relevant legislation. (Information is available on the official website of the Department:www.moi.gov.cy/crmd

 

  • Please further note that, in cases of foreign spouses of Cypriots who have at least one child with their Cypriot spouse, the period of time required for acquisition of Cypriot citizenship by Naturalization (Type M127) will be five years instead of previously required seven years.

 

For further information, please contact:

 

Elena Oratis

Advocate
(+357) 25 50 80 57

eoratis@aretilaw.com

New and accelerated procedure for granting Immigration Permit to applicants who are third country nationals and intent to invest in the Republic of Cyprus

Published on Thursday, 20 September 2012 12:18

ACCELERATED PROCEDURE FOR GRANTING IMMIGRATION PERMIT TO APPLICANTS WHO ARE THIRD COUNTRY NATIONALS AND INTENT TO INVEST IN THE REPUBLIC OF CYPRUS
According to the provisions of Regulation 6(2) of the Aliens and Immigration Regulations, the Minister of the Interior decided to issue Immigration Permit to applicants, who are third country nationals, provided that they fulfill the following criteria:

  1. The applicant must prove that he has at his disposal a secured minimum annual income of €30.000, from sources other than employment in Cyprus. The required income of €30.000 could derive from salaries of employment abroad and not in Cyprus, pensions, stock shares, rents, etc. The necessary minimum annual income is increased by 5,000 Euro for each dependent person.
  2. The applicant must submit the application form accompanied with a Title of ownership or contract of sale, of a property in Cyprus, a house, apartment or other building, of a minimum market value of €300.000 and proof of payment for at least €200,000. The contract of sale should already have been submitted to the Department of Lands and Surveys.
  3. The applicant must submit a confirmation letter from a Cypriot Bank stating that he has deposited a minimum capital of €30.000 in an account, which will be pledged at least for a three year period.
  4. The applicant must submit a Criminal Record Certificate (if the applicant resides abroad), which must be issued by the Authorities in his country of origin, and he should not constitute in general any threat against public order or security in Cyprus.
  5. The applicant should submit a Statement that he does not intent to work or be engaged in any form of business in Cyprus.
  6. The applicants should visit Cyprus at least once every two years.

 

NOTE:

It is noted that the amounts mentioned in paragraphs (b) and (c) should be proven to have been transferred to Cyprus from abroad.

 

For further information, please contact:
Elena Oratis

Advocate
(+357) 25 50 80 57

eoratis@aretilaw.com

Cyprus Tonnage Tax System (Law 44(I)/2010)

Published on Friday, 26 October 2012 12:28

 

After the recent issuance of the Circular 44/4012 and 45/2012, the Department of Merchant Shipping clarified the application of the tonnage tax system.

 

Taxation of Owners of Yachts and Pleasure Craft registered in the Register of Cyprus Ships

That is to say under the Circular 44/2012, the owners of yachts or pleasure crafts, registered in the Cyprus Register of Ships will not be required to submit Income tax return to the Inland Revenue Department, even though they are deemed to be non-qualifying owners, provided that the only asset owned by these persons is the above yacht or pleasure craft and provided, that it is not used for any other purpose rather than for the exclusive use/ recreational pleasure of the owner of the company.

 

Alternatively, if the yacht or pleasure craft is used either wholly or partially for commercial purposes, the owner must submit income tax returns and tax computations to the Inland Revenue Department and will be taxed accordingly.

 

 

Submission of income tax returns for the period before 31/12/2009

 

It was noted that the Inland Revenue Department was requiring from some shipping companies to submit income tax returns for the period up to the year ended December 31 2009.

In such cases where the registered owners and registered bareboat charterers of Cyprus ships earning income from the operation of such ships or ship management companies earning income from the provision of ship management services, who have received such income tax notification, are required to apply to the Department of Merchant Shipping in order to issue a tax clearance certificate.

On presentation of this certificate, they will be released from the obligation to submit income tax returns, provided that they have no other sources of income.

«THE LATEST AMENDMENTS IN THE CYPRUS TAX LEGISLATION»

Published on Monday, 11 June 2012 12:23

The House of Representatives voted on 24 May 2012 various amendments in the following Laws:

  • The Income Tax Law
  • The Special Defence Law
  • The VAT Law

The amendments aim to enable the stimulation of growth and to promote foreign investment.

 

AMENDMENTS IN THE INCOME TAX LAW

 

1. SPECIAL REGIME FOR INTELLECTUAL PROPERTY RIGHTS

Incentives are offered for companies that own intellectual property rights as follows:

ü  Capital allowances at the rate of 20% are granted on any expenditure incurred for the purchase or development of intellectual property

ü  80% of the profit arising from intellectual property rights (including any compensation for misuse of such items) is granted as an allowable deduction

ü  80% of the profit arising from the disposal of intellectual property rights is granted as an allowable deduction

 

The profit is calculated after deducting from the income arising from the exploitation or disposal of intellectual property rights, the expenses incurred for producing such income.

 

ENTRY INTO FORCE: The amendment will come into force as from 1 January 2012

 

The special regime for intellectual property rights offers significant incentives to companies operating in the Intellectual Property sector and enhances Cyprus competitive edge against other jurisdictions as it allows for a maximum effective tax rate of 2%

 

2. INCREASE OF CAPITAL ALLOWANCES

Capital allowances of 20% for plant and machinery and of 7% for hotel and industrial buildings are granted for assets that will be acquired during the tax years 2012 — 2014.

 

3. DEDUCTION OF INTEREST IN RELATION TO ACQUISITION OF SHARES IN A WHOLLY OWNED SUBSIDIARY COMPANY

Interest payable in relation to the acquisition of shares in a wholly owned subsidiary, will be treated as tax deductible provided that the subsidiary does not own any assets which are not used for business purposes.

 

In the event where the subsidiary owns such assets, the interest expense of the holding company will be restricted to the percentage that relates to such assets.

 

ENTRY INTO FORCE: The amendment applies for shares acquired as from 1 January 2012.

The tax deductibility of interest payable will allow companies to further reduce their tax liability and provides incentives to holding companies for investments in trading and other companies.

 

4. GROUP RELIEF

A company will be considered as part of a group for group relief purposes in the year of incorporation/acquisition by the parent company, irrespective of the fact that it was not part of the group for the whole tax year.

 

In accordance with the group relief provisions prior to the amendment, a company was considered to be part of a group for group relief purposes, if it was part of the group for the whole year.

Under the new amendments, in the event that a company is Incorporated or acquired by its parent company during a tax year, the company will be considered as a member of the group (75% shareholding) for the whole tax year, for the purpose of surrendering of losses between group companies, thus allowing group relief provision to come into effect from the year of incorporation/acquisition.

 

ENTRY INTO FORCE:  The amendment will come into force as from 1 January 2012.

 

5. APPLICATION OF THE ARM’S LENGTH PRINCIPLES (ARTICLE 33)

T he provisions of Article 33 shall not apply for transactions between a parent company and its directly wholly owned subsidiary in the event where the provisions of Article 13 for the surrendering of group losses will apply. The amendment applies to transactions between Cyprus companies only.

 

ENTRY INTO FORCE: The amendment will come into force as from 1 January 2012.

 

The new amendment provides that loans granted by a Cyprus holding company to its 100% Cyprus direct subsidiary, can now be granted interest free with no deemed interest at the prevailing market rate being imposed. This creates opportunities for a more efficient tax planning in order to optimize the tax benefits for Cyprus resident companies.

 

AMENDMENTS IN THE SPECIAL DEFENCE LAW

 

Temporary and conditional elimination of deemed distribution

Any amounts invested for the acquisition of facilities, machinery and buildings (with the exception of saloon cars) will be deducted from the profits for the purposes of deemed dividend distribution.

 

ENTRY INTO FORCE: The amendment shall apply only for profits arising in tax years 2012- 2014.

 

AMENDMENTS IN THE VAT LAW

 

1. EXTENSION OF REDUCED RATE OF 5% FOR THE ACQUISITION OF RESIDENCE IN CYPRUS

The reduced rate of 5% for the acquisition of buildings is extended to foreign citizens, provided that the buildings are used as the primary and permanent place of residency in the Republic.

 

2. SPECIAL REGIME FOR PRIVATE AIRCRAFTS

Under the special regime, VAT shall no longer be payable upon the importation of private aircrafts in the Republic by taxable persons, but instead it shall be payable upon the submission of the VAT return.

 

LAND TRANSFER FEES

 

In accordance with the provisions of the Law, no land transfer fees are imposed in case where the property being transferred is subject to VAT. In addition in case of land and/or buildings that are being sold for the first time, then the land transfer fees are reduced by 50%.

The amendments provide for an extension in the application of the Law regarding the elimination/reduction of land transfer fees, until the end of December 2012.