Cyprus 2019 NID Rate

by | Feb 18, 2020 | Cyprus Tax

The Cyprus Department of Taxation has published the rates applicable for the 10 year government rate of each state, which once increased by 3%, constitutes the reference rate for the purposes of the Cyprus Notional Interest Deduction (NID) for the year ended 2019.

Cyprus 2019 NID Rate in practice means that the maximum allowable deduction shall be equal to the reference rate of the jurisdiction of the asset.

Referring back to the initial publication on the Cyprus Notional Interest Deduction (NID) the calculation would be as follows when considering the Cyprus 2019 NID Rate:

#NID CalculationAsset 1 €mAsset 2 €mAsset 3 €mTotal €m
1New Equity505050150
2NID [New Equity x reference Rate]4.764.615.3
3Taxable profit after deduction direct and apportioned indirect expenditure1051227
4NID Cap (80% of the taxable profit [80% x (#3)]849.621.6
5Deductible NID for each asset [lower of (2) and (4)]4.744.620.2
6Taxable profit [(#3)-(#5)]6.8

The scenario above takes into account the Cyprus 2019 NID Rates. A hypothetical investment into India, South Africa and Russia and a varied rate of return per investment.

Cyprus 2019 NID Rates

Abu Dhabi2.5142.302
Dubai ($US)3.1604.7224.402
Isle of Man1.7122.305
Israel ($US)2.5203.900
Kazakhstan ($US)2.5664.2324.2045.311
Kazakhstan ( )0.9662.463
Belarus ($US)5.3507.2265.946
South Africa9.0189.2068.780
The Netherlands-0.0600.3830.501
Ukraine ($US)6.50410.7807.2228.7059.622
Russia ($US)2.6055.0203.8224.4096.6006.580
Saudi Arabia2.7784.722
Czech Republic1.5691.8841.6500.4140.499
Honk Kong1.6991.9461.754

The reference rates above mentioned are extracted from the Cyprus Tax Departments publication. You may access them by following the above link.

Harris Sharpe

Harris Sharpe

Author - Photographer

For many years he has worked and devoted his skills and efforts towards building a successful career as a leading executive. From humble beginnings, his aim has always been to yield results; with a keen focus to attention to detail and client satisfaction. His experience has always been varied and not specific, at times he preferred it. With that in mind, he has dealt with CySEC on licensing and ongoing regulation, international private equity and credit fund managers, NASDAQ and NYSE listed companies occasional millionaires as well as self-made millionaires. His passion though is difficult transaction work organizing and deploying people for a common goal. Harris enjoys reading and studying the Cyprus law and sharing that information on this website.

Relevant Tax Publications

Publications on Cyprus Business Law

Cyprus Annual Return HE32 for Companies

Cyprus private companies limited by shares are required to prepare and submit to the registrar of companies an annual return HE32. The Cyprus annual return HE32 must be accompanied by (1) Audited Financial Statements (the “FS”) and (2) Declaration of the Director and Secretary (the “Declaration”) confirming that the FS submitted are those presented to the shareholder at an Annual General Meeting (“AGM”)

Cyprus Company Formation

A company is formed in Cyprus by way of law. The principal legal instrument giving such right is the Companies Law, Chapter 113 of the laws of the Republic of Cyprus, however the memorandum and articles play an equal important role in a Cyprus Company Formation. These two ‘constitutional’ documents are often called upon to deal with business matters of the Company and in other times to define the rights of the various parties.

Private Company Limited by Shares

A Cyprus Private Company Limited by shares is a class of private companies incorporated in accordance with the Cyprus Companies Law, Chapter 113 of the laws of the Republic of Cyprus. It is the most frequently used vehicle in Cyprus its numbers, statistics of the Registrar of Companies, being over 200.000 and on an annual basis around 14.000 new companies are incorporated every year.

Cyprus Registrar Forms legality issues and effect

Within the Companies Law, Chapter 113 of the Laws of the Republic of Cyprus the term “Prescribed Form” (καθορισµένο τύπο) which means the Cyprus Registrar Forms is mentioned several times. Although the Companies law requires information to be submitted in the Prescribed Form this does not create automatic legality of the said action (e.g. change of director) is not implied

Transfer of shares when is it effective?

In the case of Morsa Trading the district court held that a person becomes a registered member of a Cyprus company when that person’s name is registered in the register of members. Accordingly, the transfer of shares in a Cypriot Company requires, amongst other things, the registration in the register of members.

Company Migration to Cyprus

Migrating a company to Cyprus is not without its challenges, nevertheless if the foreign countries laws allow a company may redomicile and migrate to Cyprus. After which time it will be registered under the companies law.

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