Additional Rates For Calculating Notional Interest Deduction For New Equity Capital Announced

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Elias Neocleous & Co LLC

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Elias Neocleous & Co LLC is the largest law firm in Cyprus and a leading firm in the South-East Mediterranean region, with a network of offices across Cyprus (Limassol, Nicosia, Paphos), Belgium (Brussels), Czech Republic (Prague), Romania (Budapest) and Ukraine (Kiev). A dynamic team of lawyers and legal experts deliver strategic legal solutions to clients operating in key industries across Europe, Asia, the Middle East, India, USA, South America, and China. The firm is renowned for its expertise and jurisdictional knowledge across a broad spectrum of practice areas, spanning all major transactional and market disciplines, while also managing the largest and most challenging cross-border assignments. It is a premier practice of choice for leading Cypriot banks and financial institutions, preeminent foreign commercial and development banks, multinational corporations, global technology firms, international law firms, private equity funds, credit agencies, and asset managers.
Earlier in 2016 the Tax Department announced the 10-year government bond rates at December 31 2014, which will be used as the basis for the notional interest deduction for the 2015 tax year for Cyprus, Germany, India, Romania and Russia...
Cyprus Wealth Management

Bond rates

Earlier in 2016 the Tax Department announced the 10-year government bond rates at December 31 2014, which will be used as the basis for the notional interest deduction for the 2015 tax year for Cyprus, Germany, India, Romania and Russia (for further details please see "New rates for calculating notional interest deduction for new equity capital"). It subsequently announced the corresponding rates at December 31 2015, as well as a rate for Ukraine, which will be used as the basis for the notional interest deduction on capital introduced during 2016.

The Tax Department has now announced rates at December 31 2015 for the Czech Republic, Latvia, Poland and the United Arab Emirates, on which the notional interest deduction on capital introduced in 2016 will be based. The notional interest deduction for capital introduced during 2015 to finance assets used in any of these countries or in Ukraine will be based on the rate for Cyprus.

The bond rates announced so far are set out in the table below.

Notional interest deduction rates

Based on the above, the notional interest deduction rates for the 2015 and 2016 tax years are set out in the table below.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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