As on the 7th July 2022, the Cyprus House of Representatives passed amendments to the Income Tax Law, as follows:

  • Increased deduction by 20% on the actual expenditure incurred on scientific research as well as research and development. According to the new provisions of the Law, an increased deduction of 20% will be granted on the actual expenditure for scientific research as well as research and development, as recognized on the basis of the international accounting standards, incurred by a person carrying on a business and who has the economic ownership of the intangible asset that results or may result from incurring such expenditure.

  • The increased deduction will also be granted in thecases where the expenditure that will be incurred willbe of a capital nature and capital allowances will beclaimed on the said expenses.

  • The increased deduction that will be granted based onthe provisions indicated above cannot be claimed inthe cases where a deduction will be claimed on thequalifying profits that are generated by a qualifyingintangible asset based on the provisions of section9(k) of the Law.

  • The increased deduction indicated above will apply onthe expenditure that will be incurred during the years2022, 2023 and 2024.

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.