Travel to Cyprus

Archive for September 8th, 2011

Все импортные товары, перечисленные в Приложении V,  Закона 95 (I)/2000 о НДС, попадают под пониженную ставку НДС- 5%, при условии соблюдения   упомянутых там условий. Вот несколько примеров:

• удобрения, инсектициды, родентициды, фунгициды, гербициды, дезинфицирующие средства;
• корм для животных, продукты питания для птиц и рыб;
• кормовые добавки для животных;
• гробы;
• семена и предметы для приготовления пищевых продуктов и кормов для животных;
• животные, используемые для получения продуктов питания;

Нулевая ставка НДС

Все импортные товары, перечисленные в Приложении VI,  Закона 95 (I)/2000 о НДС, попадают под нулевую ставку НДС, при условии соблюдения   некоторых условий. Вот несколько примеров:

• продукты питания;
• медикаменты, классифицируемые как таковые в соответствии с таможенным законодательством;
• газеты, журналы и т. п. ;
• детская одежда и обувь;
• слуховые аппараты;
• вакцины для людей и животных;
• инвалидные кресла-коляски;

Предметы освобожденные от НДС

Все импортные товары, перечисленные в Приложении VII,  Закона 95 (I)/2000 о НДС, освобождаются от уплаты НДС, при условии соблюдения   некоторых условий. Вот несколько примеров:

• зубные протезы поставляемые стоматологами и зубными техниками;
• человеческие органы, кровь и человеческое молоко;
• поставки почтовых марок по номинальной стоимости;

Стоимость импортируемых товаров в целях налогообложения НДС

Налогооблагаемая стоимость НДС включает в себя:

• таможенную стоимость импортируемых товаров, в установленном, таможенным законодательством, порядке;
• все пошлины, налоги и  сборы собранные при ввозе;

Исключением из правила, является доставка импортируемых товаров для домашнего использования, перед таможенной очисткой. Например, в случае, когда  товары продаются импортером другому лицу, во время их  нахождения  в складах временного хранения или на таможенных складах. Налогооблагаемая стоимость в таком случае составляет стоимость доставки (т.е. продажи), при условии что  она не ниже таможенной стоимости. Если товары продаются таким образом более одного раза, налогооблагаемая   стоимость равняется  цене продажи, по отношению к последнему покупателю, помещающему  товар в целях свободного обращения.

НДС при ввозе товаров

НДС налагается на все импортируемые товары, вне зависимости от подлежания импортера к уплате НДС.  Данный налог рассматривается как импортная пошлина. Она  начисляется и  уплачивается в момент оплаты  в соответствии с таможенным законодательством.

Таможенное законодательство применяется к импортируемым товарам в целях обложения  НДС. Также следует отметить, что существует ряд поправок и  исключений, предусматриваемых налоговым законодательством.

НДС уплачиваемый при ввозе, рассматривается как входной налог, касающийся лиц, подлежащих уплате НДС.

Стандартная ставка НДС

В целом, импорт, за немногими исключениями, предусмотренными налоговым и таможенным законодательством, подвергается стандартной ставке таможенной  пошлины, которая составляет 15%.

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V.A.T. is imposed on all imported commodities whether the importer is a person liable to V.A.T. or not. Οn importation, it is considered as an import duty and it is charged and paid at the time at which the import duty is paid according to the customs legislation.

The customs legislation is applied to imported goods for V.A.T. purposes, with the exceptions and amendments provided by the V.A.T. legislation.

V.A.T. paid on importation is considered to be an input tax for persons liable to V.A.T.

Standard rate of V.A.T.

In general all importations, with few exemptions provided by the V.A.T. and customs legislations, are subjected to the standard rate of duty, which is 15%.

Reduced rate of V.A.T.

All imported goods listed in Annex V to the V.A.T. Law 95(I)/2000 are subject to reduced rate of V.A.T. which is 5%, provided that the prerequisites mentioned there apply. Here are some examples:

• coffins;
• fertilizers, insecticides, rodenticides, fungicides, herbicides, disinfectants, etc;
• animal feeding stuffs, food for birds and fish;
• additives for animal feeding stuffs;
• seeds and items for preparation of foodstuffs and animal feeding stuffs;
• live animals used in the preparation of foodstuffs.

Zero rate of V.A.T.

All imported goods listed in Annex VI to the V.A.T. Law 95(I)/2000 are subject to zero V.A.T. rate, provided that the prerequisites mentioned therein apply. Some examples are:

• foodstuffs for human consumption;
• medicaments classified as such according to customs legislation;
• newspapers, magazine, etc
• clothing and footwear for children;
• hearing aids;
• human and veterinary vaccines;
• invalid wheelchairs.

Exempted items

All imports of goods mentioned in Annex VII to the V.A.T. Law 95(I)/2000 are exempted from payment of V.A.T. Here are some examples:

• dental prostheses supplied by dentists and dental technicians;
• human organs, blood and human milk;
• the supply at face value of postage stamps.

Value of imported goods for V.A.T. purposes

The taxable value for V.A.T. includes:

• the customs value of imported goods, as defined by customs legislation; and
• all duties, taxes or other levies collected on importation.

The case where imported goods are delivered before their clearance for home use is an exception to this rule. This is for example the case whereby goods are sold by the importer to another person while they are in temporary storage or in a customs warehouse. The taxable value in such a case is the value of delivery (i.e. sale), provided it is not lower than the customs value. If the goods are sold under such conditions more than once, the taxable value shall be taken to be the sale price to the last buyer, who will place the goods in free circulation.

Cyprus Corporate Services Multilysis Services Limited

Cyprus Lawyers N. Pirilides & Associates LLC

On the 26^th of August 2011, the House of Representatives voted as a first package of measures a number of amendments to tax legislation for the purpose of raising revenues and decreasing government spending and for the objective entry into the support mechanism.

These changes relate to increasing various taxes, introducing a levy for all companies incorporated in Cyprus, as well as introducing and/or increasing contributions to pension schemes of government employees, local authorities and semi-governmental organizations, and introducing a special levy for two years on the salaries and pensions paid to government employees, local authorities and semi-governmental organizations.

In the next few months a second and probably a third package of additional measures is expected, which hopefully should focus on further reductions in government spending. The increase in the VAT rate from 15% to 17% is expected to be approved with the second package of measures.

The most significant changes in the tax and company legislation are set out below:

The Income Tax Law

• Increase in the maximum personal income tax rate to 35%

A new income tax rate of 35% is introduced for individuals on taxable income in excess of €60.000.

• Tax incentives for the employment in Cyprus of highly paid non Cypriot resident individuals

In order to encourage the establishment or development in Cyprus of new businesses, tax incentives are offered for the employment in Cyprus of persons who are not tax residents of Cyprus. In such a case, if the income from employment exceeds €100.000 per annum, a 50% deduction is permitted for such income for the first 5 years of employment. The incentive is granted both to Cypriots and non-Cypriots, on condition that prior to the employment in Cyprus, such a person was resident outside Cyprus and was not considered as a tax resident of Cyprus.

• Abolition of exemption from taxation of the President of the Republic and the President of the House of Representatives

The exemption from taxation of the official emoluments and the pension of the President of the Republic and the pension of the President of the House of Representatives is abolished.

• Entry into force

The increase in the personal tax rate will come into effect as from the 1^st January 2011, whereas the incentive for new employees will come into force for employments starting as from the 1^st of January 2012.

The Special Contribution for the Defence Law

• Increase in the rate of defence tax on interest from 10% to 15%

The rate of special contribution for the Defence of the Republic (“defence tax”) on interest received or credited by Cypriot tax residents is increased from 10% to 15%. This applies to both individuals and corporations.  In the case of corporations, if the interest results from the ordinary carrying on of any business, including any interest closely connected with the ordinary carrying on of the business, it is not subject to defence tax, but instead is subject to corporate income tax. Therefore, financing companies, including companies involved in intra –group financing activities, are not expected to be affected from the involved in intra–group financing activities, are not expected to be affected from the change in the rate. It should be noted that no defence tax is payable on interest payments to non residents. It should also be noted that this provision applies to interest received by resident individuals or corporations, both from sources within Cyprus and outside of Cyprus.

For provident funds, defence tax on interest received remains at 3%, as well as in the case of an individual whose total income for the year does not exceed €12.000 (including interest income). The same rate applies to interest received by an individual from Government savings certificates and developments stocks.

• Increase in the rate of defence tax on dividends from 15% to 17%

The rate of defence tax on dividends received by a Cypriot tax resident is increased from 15% to 17%. This applies only to individuals, since under the provisions of the legislation companies are generally exempt from the payment of defence tax on dividends.

The increase in the rate also applies when the deemed distribution rules ate applied in cases where a tax resident company does not distribute within two years at least 70% of its after tax profits.

It should be noted that no defence tax is levied on dividends paid to non-resident individuals or corporations. It is also noted that the deemed distribution rules are not applicable in the case where shareholders of a resident company ate non tax residents of Cyprus. However, the deemed distribution rules are applicable in the case of a Cypriot tax resident company owned by another Cypriot tax resident company, which in turn is owned by non residents. It is expected that shortly such companies will be included from the provisions of the deemed distribution rules, therefore there should be a significant benefit for such companies in case of inability to distribute an actual dividend.

• Entry into force

The above provisions will enter into force as soon as the new law is published in the official gazette of the Republic.

The Immovable Property Tax Law

The rates applicable for the payment of immovable property tax, which is paid by both individuals and companies on property owned in Cyprus are significantly increased, as well as the threshold as from which taxes are paid is lowered. It should be noted that tax remains levied on the assessed value of the property as at 1 January 1980. The rates are as follows:

Up to €120.000                                                  0%0

 From €120.000 to €170.000                           4%0

From €170.001 to €300.000                            5%0

From €300.001 to €500.000                            6%0

From €500.001 to €800.000                            7%0

Over €800.00                                                      8%0

The increase will be effective as from the year 2012.

The Companies Law

• As from 2011 an annual levy of €350 is introduced for all companies incorporated in Cyprus payable to the Registrar of Companies. For groups of companies the maximum levy is fixed at €20.000.
• The levy for 2011 must be paid by 31 December 2011, whereas the levy for 2012 onwards must be paid by 30 June of each year.
• Dormant companies, companies which do not own any assets, as well as companies owning property located in the non Government controlled areas of Cyprus are exempted from the payment of the levy.

In case where the levy is not paid within the prescribed period, if the levy is paid within two months from the due date, a penalty of 10% is payable which is increased to 30% if the levy is paid within five months from the due date. If the levy is not paid within five months, the Registrar of Companies will remove the company from the registry (something which is expected to restrict the company from filing documents or requesting certificates from the Registrar’s Office). The return of the company to the registry can be effected within two years with the payment of a levy of €500 per annum and thereafter with the payment of a levy of €750 per annum.

The Value Added Tax Law

Under existing legislation, individuals who buy or construct a flat or house to be used as private main residence ate entitled to apply for a refund amounting to about €17.000 from the Government. This provision is replaced with the introduction of a reduced VAT rate of 5% on the purchase or construction of a house or flat to be used as private main residence, provided the area of the property does not exceed 200 square meters if the total area of the property does not exceed 300 sq.m).

Cyprus Corporate Services Multilysis Services Limited

Cyprus Lawyers N. Pirilides & Associates LLC