The Cyprus Tax Department has now announced the 10-year government bond yields as of 31 December 2018, which will be used as the basis for the Notional Interest Deduction (NID) for the tax year 2019 (original announcement in Greek).
Note: NID is a new tax incentive introduced back in 2015. Under this new extremely positive legislative initiative it is now possible for a company to claim a NID on the new capital introduced into the company. NID can be used as a tax optimization option for financing and related arrangements.
You may refer to the reference interest rates below as published by the Tax Department:
|Country||10 Year Bond Yield||Country||10 Year Bond Yield|
Based on the Tax Department’s notification, the minimum reference interest rate to be used for NID purposes for the tax year 2019 should be 5,302% (that being 2,302% yield on the 10-year Cypriot government bond plus 3% as dictated by Article 9B of the Income Tax Law).
Please see Cyprus – Notional Interest Deduction on New Capital for more details.
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