We use cookies to give you the best online experience. By using our website you agree to our use of cookies in accordance with our cookie policy. Learn more here.Close Me
Legislation was enacted in April requiring credit institutions
operating in Cyprus to pay a levy of 0.095% on their customer
deposits from 2011 onwards. For the first two years, seven-twelfths
of the amounts raised by the levy will be used to reduce the
government deficit and the remaining five-twelfths will be used to
fund a financial stability fund. From 1 January 2013, the entire
amount raised by the levy will be credited to the financial
stability fund.
The amount payable in any year will be calculated on the basis
of customer deposits as at 31 December of the preceding year. No
levy will be imposed on inter-bank deposits. The levy will be
payable by:
Cyprus banks in respect of their banking activities in Cyprus
(overseas branches and subsidiaries will not be subject to the
levy);
the Cyprus operations of foreign (EU and third-country) banks
and credit institutions; and
co-operative credit institutions.
The levy will be limited to 20% of the taxable profit for the
year in which it is paid. It will not be deductible for the purpose
of calculating taxable profits but it will reduce the amount of
profits subject to deemed dividend distribution.
The declaration of taxable deposits on the preceding 31 December
must be made by 31 March each year, and the levy will be collected
in four equal instalments at the end of each quarter, starting 31
March. The declaration of taxable deposits may be revised up to 31
December. For 2011, the declaration must be submitted and the first
instalment paid by 31 May 2011.
The Commissioner of Income Taxes has the power to raise
assessments for the levy and to collect it from banks.
The tax authorities are required to issue final income tax
assessments within six months from the date the corporate income
tax return is submitted and any overpayment above the 20% limit
must be refunded within a month after the issue of the final income
tax assessment.
At this stage the regulations for the establishment and
operation of the Financial Stability Fund have not been finalised.
They must be issued within six months from the date the law comes
into force, failing which any levy collected must be returned to
the credit institutions concerned.
The cost of the levy is intended to fall on banks, not their
customers, and the law introducing the levy includes provision for
a fine of up to €100,000 to be imposed on credit
institutions which are found to have passed the cost onto their
customers.
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.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Cayman Finance, which represents much of the financial community in the Cayman Islands submitted a letter on May 22nd highlighting massive inaccuracies in an article by Sir Simon Jenkins.
One of the fundamental principles of company law is that a lawfully incorporated company has a legal personality and identity that is separate from its directors or shareholders.
Reports in the UK suggest a dossier of more than 100 names of people with money here, and other tax free jurisdictions, has been compiled to find those who are avoiding paying tax.
14 May 2013 (Cayman 27) The head of Cayman Finance has rejected claims from economist Jeffrey Sach that some residents here sit on hundreds of hedge fund boards.
Following on from our recent article on the Companies Act 2011, the Companies Act 2012 further demonstrates the Isle of Man’s commitment to seeking transparency in the ownership of companies.
As the private client industry in Jersey seeks to attract clients from the emerging jurisdictions it is likely to become increasingly involved with putting in place succession planning and asset protection structures that relate to family businesses.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
