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    Aspen Trust Group Newsletter Aspen Trust Group Newsletter Document Transcript

    • Seize the advantage of our expertiseNewsletterThis publication should be used asan initial source of generalinformation only. It is not intendedto give a definitive statement of the Cyprus Business Intelligencelaw. For the specific applications of Your Essential Information on Cyprusthe law, professional advice shouldbe sought. Our directors would beglad to address any questions you Publication Date: December 2012may have. Contents Page Cyprus tax and legal news 2 - Incentives for investing in Cyprus 2 - Fast track procedure for residency update 2 - Cyprus double tax treaties updates 3 - Amendments to the law on collection of taxes 3 - Inland Revenue: Clarification on connected companies 3 International tax and legal news 4 - New tax rules in Ukraine 4 - Changes to Polish tax laws 4 - India announces tax free bond issue 5Andreas Athinodorou Energy news 5Chief Executive Officerandreas.athinodorou@aspentrust.com - Cyprus and Israel: Energy agreement 5Marina Zevedeou Our Services 6Chief Operations Officermarina.zevedeou@aspentrust.com Tax diary 7Tel. No.: +357 22418888 Legal diary 8Fax No.: +357 22418890Website: www.aspentrust.comIn association with the Cyprus taxadvisorsMembers of: Seize the Aspen advantage
    • NewsletterWelcome to the Aspen Trust Group December Newsletter (Cyprus Business Intelligence). Our aim is topresent the key highlights of the tax and legal changes in Cyprus as well as any international, local,investment, and financial news that have an impact on Cyprus as a Financial Centre.In this issue we present to you the incentives for high net worth individuals that the Government ofCyprus has recently revised. The fast track procedure for immigration permits, which we described in ourSeptember Newsletter, has already had positive feedback, and we hope these new incentives will attracteven more investors to Cyprus.We also give you the latest updates on the Double Tax Treaties between Cyprus and the followingcountries: Spain, Portugal, Finland and Poland. Our other local news includes amendments to the law onassessment and collection of taxes and clarifications on the application of the income tax law toconnected companies.In International Tax and Legal News we provide an overview of the changes in Ukrainian and Polish taxlaws and focus on the announcement by the Indian authorities regarding the issuing of tax free bonds.In our Energy News section we talk about the recent ratification of the cooperation agreement betweenCyprus and Israel.We hope you enjoy our last Newsletter for this year.Contact us at info@aspentrust.com for more information on what the Aspen Trust Group can do for youand your business.Cyprus tax and legal newsIncentives for investing in CyprusOver the course of the last three years, Cyprus’ Residence and Citizenship scheme has managed togenerate substantial interest from numerous third country individuals that are among the richest peoplein the world The Government of Cyprus has recently revised the incentive scheme targeting these thirdcountry nationals in order to attract an even greater number of high net worth investors from abroadPlease download our Update Memo: Incentives for Third Country Nationals to Invest in Cyprus formore detailed information on the revised incentive scheme and to see how the Aspen Trust Group canassist you and / or your clients with the Cyprus residence permit and citizenship application procedure.Fast track procedure for residency updateSince the introduction of the new “fast track” procedure in August 2012, ten residence permits for thirdcountry nationals have been granted by the Ministry of the Interior. The Ministry announced that theentire procedure was completed within less than two months from the date of submission of eachapplication.The Aspen Trust Group has assisted clients in the procedure of obtaining residence permits, pleasecontact our team at info@aspentrust.com to find out how we can assist you.Source: Ministry of the Interior, www.moi.gov.cy 2 Elia House, 77 Limassol Avenue, 2121 Nicosia, Cyprus, Tel. No.: +357 22418888 Fax. No.: +357 22418890 E-mail: info@aspentrust.com; www.aspentrust.com
    • NewsletterCyprus double tax treaties updatesCyprus continues to extend its network of Double Tax Treaties. Firstly, at the end of November 2012Cyprus and Spain commenced negotiations on a Double Tax Treaty. We look forward to updates andshall bring you the latest news as soon as they are published.The Cyprus – Portugal Double Tax Treaty and the related protocol were signed by the two countriesfollowing Cyprus’ removal from Portugal’s Black List. You can find more detailed information in ourUpdate Memo: Cyprus – Portugal Double Tax Treaty.Cyprus – Finland Double Tax Treaty was signed in November. The main provisions of the treaty cannow be found in our Update Memo: Cyprus – Finland Double Tax Treaty.The ratification process of the Double Tax Treaty between Cyprus and Poland was completed at the stbeginning of November 2012 and the protocol will apply from the 1 of January 2013. Please downloadthe Update Memo: Cyprus – Poland Double Tax Treaty.Amendments to the law on collection of taxes thOn the 15 of November 2012 the House of Representatives voted through the amendments to theAssessment and Collection of Taxes Law in an effort to minimize the administrative burden for stcompanies and the Department of Inland Revenue amendments will come into effect on the 1 ofJanuary 2013 and include the following:a) The number of provisional tax instalments made by companies and self-employed individuals is st reduced from three to two. The first instalment is due by the 31 of July and the second - by the st 31 of December of the year to which they relate;b) The electronic submission of the Employer’s Return form (I.R.7) becomes mandatory. The th st submission deadline of the form is extended by three calendar months, from the 30 of April to 31 of July;c) Documentation supporting the tax returns needs to be kept for six years from the end of the related tax year, as opposed to the previous requirement of seven years.For more detailed information or clarification on how the above developments affect your business,please contact our team at Aspen Trust Group at info@aspentrust.com.Inland Revenue: Clarification on connected companiesIn a recent meeting with the Cyprus Institute of Certified Public Accountants, the Inland RevenueDepartment clarified how it will interpret the Article 33 of the Income Tax Law 2001 relating tocontributions made by companies to related companies overseas as well as to the transfers of assetsthat do not give rise to taxable income.Article 33 gives the Department the right to adjust transactions between connected companies,individuals and entities based on the arm’s-length principle and to tax the resulting deemed profits, gainsor benefits.1. Transfers of assets: The Department of Inland Revenue will not apply Article 33 to transfers that do not give rise to taxable income hence no deemed receivable is created and no secondary adjustments are required This applies to assets that are disposed to related parties at a price different from the market price.2. The Inland Revenue Department will not apply Article 33 when a Cyprus company makes a capital contribution to a related company without receiving shares in consideration provided that it can be proven that the Cyprus entity has no right to claim back the amount concerned and this amount can only be returned to the Cyprus company by means of a reduction of capital or the liquidation of the foreign company, unless the contribution is returned (whether by way of reduction of capital or liquidation) within two years.Please contact our team at Aspen Trust Group at info@aspentrust.com for further clarifications. 3 Elia House, 77 Limassol Avenue, 2121 Nicosia, Cyprus, Tel. No.: +357 22418888 Fax. No.: +357 22418890 E-mail: info@aspentrust.com; www.aspentrust.com
    • NewsletterInternational tax and legal newsNew tax rules in UkraineIn addition to the incentives to companies in “priority industries” and the Cyprus – Ukraine Double TaxTreaty, the Parliament of Ukraine adopted a new piece of legislation which introduces amendments tothe Tax Code and other laws and regulations. Please find below a summary of the major amendments:1. Simplified VAT registration procedure: Tax authorities are now required to complete the VAT registration based on the relevant application within five days. To be eligible for VAT registration the taxpayer will only need to verify that it makes supplies subject to VAT, despite of the value of such supplies, the VAT status of the taxpayer’s clients or the amount the taxpayer’s charter capital;2. Taxation of individual’s foreign-sourced dividends: The personal income tax rate on dividends received from companies incorporated outside Ukraine is set to 5% by the new tax law. Previously only Ukrainian sourced dividends enjoyed the 5% tax rate. Dividends need to be declared in the st annual tax return, which has to be filed by the 1 of May following the reporting year; st3. CPT advance payments: From the 1 of January 2013 onwards a new procedure for Corporate Profit Tax will apply to companies whose annual income exceeds UAH10 million (approximately €1.25 million). The new rules will not apply to non-profit organizations, agriculture and newly established companies. According to the new procedure, a taxpayer pays CPT monthly and uses the financial figures of the previous year. This monthly CPT payment is determined as the profit for the previous year divided by 12 months;4. Tax losses carry forward: According to the new rules, the total amount of tax losses incurred st st before the 1 of January 2012 (including those incurred before the 1 of April 2011) will be divided into 25% parts and deducted for CPT purposes from 2012 to 2015 consecutively. This 25% tax loss limitation will be applicable only to companies whose 2011 income exceeded or was equal to UAH1 million (approximately$ 95,200). For companies with income below this threshold the historical tax losses are deductible in full.Cyprus plays a very important role in Ukrainian foreign trade and investment. The island remains thelargest investor in Ukraine’s economy and both countries have a huge potential to further developmutually beneficial commercial relations. For more information on how Aspen Trust Group can assistyour business in investing in Ukraine, please contact our team at info@aspentrust.com.Source: International Law Office, www.internationallawoffice.comChanges to Polish tax laws st stPoland is planning extensive changes to its tax law, effective from the 1 of January 2013 and the 1 ofJuly 2013. Please find more detailed information in out Update Memo – Changes to Polish Tax Laws.Changes are expected in the following areas:Changes to the Goods & Services Tax and Regulations on Invoicing · Point of Taxation · Invoices · Taxation Base · Free of charge supplies of goods rules extended · Input VAT deduction rules simplifiedChanges to the Personal Income Tax · Limitation on the copyright tax deductible costs · Child tax relief eligibility limited · Internet relief limited · New rules on taxation of income of partnerships limited by shares 4 Elia House, 77 Limassol Avenue, 2121 Nicosia, Cyprus, Tel. No.: +357 22418888 Fax. No.: +357 22418890 E-mail: info@aspentrust.com; www.aspentrust.com
    • NewsletterChanges to the Corporate Income Tax · A partnership limited by shares as a taxpayer of corporate income tax · Exclusion of a permit – the so-called participation loan · Changes regarding transfer pricing and underlying tax documentationThe Aspen Trust Group has substantial expertise and knowledge in assisting clients in Poland. Pleasecontact out team at info@aspentrust.com in order to obtain more detailed information and to discuss howthese changes might affect your business.Source: Baker Tilly Poland, www.bakertillypoland.euIndia announces tax free bond issueA notification listing ten infrastructure companies that will be allowed to issue tax free bonds up until theend of the financial year (calendar year 2012) was issued by the Indian Income Tax Department. Thebonds are available to individual retail investors, qualified institutional buyers, corporates and high networth individuals and they will be for ten, fifteen or twenty years. The goal is to raise INR 535 billion(approximately € 7.5 billion) and each company has to raise 75% of their allotted amount through publicissues, of which 40% is reserved for retail investors.The interest offered will be between 7.5%-8% and it will be capped at a rate determined by thegovernment security rate, the category of the investor and the credit rating of the issuer.The ten companies granted the permission to issue tax free bonds are: · The National Highways Authority of India · The Power Finance Corporation · The Indian Railway Finance Corporation Ltd · The Rural Electrical Corporation · The India infrastructure Finance Company Ltd · The Jawaharlal Nehru Port Trust · The Housing and Urban Development · The Dredging Corporation of India Ltd Corporation Ltd · Ennore Port Ltd. · The National Housing BankThe Aspen Trust Group has assisted various clients in investing into India. For more information on theabove and what the Aspen Trust Group can do for your business, please contact our team atinfo@aspentrust.com.Source: Tax-News.com, www.tax-news.comEnergy NewsCyprus and Israel: Energy agreementAn agreement on cooperation between the Republic of Cyprus and Israel in the areas of renewableenergy sources and energy efficiency was ratified by the House Plenary of Cyprus. rdThe agreement signed on the 3 of November 2011 aims to facilitate the cooperation of the relevantauthorities of Cyprus and Israel through exchange of knowledge and expertise regarding the instalmentand functioning of renewable energy sources. In addition, it entails the drafting and management ofrelated grants and subsidy schemes.Furthermore the agreement aims to tackle the drafting of legislation and the issuing of regulationsregarding energy efficiency of buildings, home appliances and their classifications, the development ofthe appropriate methodology and software for the energy efficiency of buildings in the residential sectorand the preparation of energy certification of buildings. Special provisions in the agreement take inconsideration energy control and projects to improve energy efficiency, inspection of boilers and airconditioning systems, as well as laboratory testing of solar water heating systems.Source: Financial Mirror, www.financialmirror.com 5 Elia House, 77 Limassol Avenue, 2121 Nicosia, Cyprus, Tel. No.: +357 22418888 Fax. No.: +357 22418890 E-mail: info@aspentrust.com; www.aspentrust.com
    • NewsletterOur ServicesThe Aspen Trust Group is an independent provider of International Business Services in the fields ofCorporate Services, International Fund Services, Private Wealth Management and Intellectual PropertyManagement Services.Offering a range of tailor made solutions to discerning investors, corporations and High Net WorthIndividuals, we take care of our clients’ interests and make sure that the implementation andmanagement of each solution is in line with their current and future ambitions.We offer services in:· International Tax Planning· Company and Trust Formation Services· Trustee and Nominee Services· Legal Administration and Company Secretarial Services· Company Administration Services· Accounting and Financial Management Services· Set-up and Administration of International Collective Investment Schemes (ICIS)· Intellectual Property Management· Residence and Citizenship SolutionsWe can provide a seamless link between the international tax planning advice, day-to-day operationsand reporting of our proposed structures:· We source the tax advice and assist in the architecture of the optimal structure for our clients’ business needs· We implement the structure in accordance to the advice· We provide the day-to-day administration and back-office support in line with the agreed advice· We liaise with third party auditors to ensure financial reporting and tax compliance is in line with the tax advice· We proactively provide our clients with new ideas on improving their company structures and enhancing their businessContact us at info@aspentrust.com for more information on what the Aspen Trust Group can do for youand your business. 6 Elia House, 77 Limassol Avenue, 2121 Nicosia, Cyprus, Tel. No.: +357 22418888 Fax. No.: +357 22418890 E-mail: info@aspentrust.com; www.aspentrust.com
    • NewsletterTax diary Date Obligation Payment of Tax Deducted (PAYE) deducted from employees’ salaries for the previous month Payment of the withholding of defence contribution on the amount of the rent paid byEnd of each month companies, partnerships and the Government and local authorities. Defence contribution deducted from dividends and interest paid for the previous month Social insurance and other contributions deducted from employees’ salaries for the previous month Submission of the deemed dividend distribution declaration for the relevant tax year (231 January each year years back) Submission of personal income tax returns by individuals earning more than €19,500 for the previous year. All tax returns irrespective of year of assessment, from 1 July 2011 and30 April each year after, have an extension of submission up to 3 months provided that they are submitted electronically Submission of employers’ return for the previous year Submission of personal income tax returns for the previous year by individuals who do not prepare audited accounts if their gross income exceeds €19,500, but are obliged to issue invoices, receipts, etc. All tax returns irrespective of year of assessment, from 1 July 2011 and after, have an extension of submission up to 3 months provided that they are submitted electronically30 June each year Payment of tax balance for the previous year through self assessment by individuals who do not prepare audited accounts, but are obliged to issue invoices, receipts, etc. Payment of special contribution for defence for the first half of the current year Submission of provisional tax assessment for the current year and payment of the first instalment1 August each year Payment of previous year’s tax balance through self assessment by individuals and companies preparing audited accounts Payment of the second instalment of provisional tax assessment for the current year30 September each year Payment of immovable property tax for the current year Submission of tax returns for the previous year for individuals and companies preparing audited accounts. All tax returns irrespective of year of assessment, from 1 July 2011 and after, have an extension of submission up to 3 months provided that they are submitted electronically.31 December each year Payment of the third and last instalment of provisional tax assessment for the current year Payment of special contribution for defence for the second half of the current year Submission of a revised provisional tax assessment for the current year (if necessary)By the 10th of the second month Submission of VAT return and payment of VAT dueafter the end of the VAT periodBy the 10th of the next month Submission of Intrastatafter the end of the monthBy the 15th of the next month Submission of VIESafter the end of the monthNon compliance with the above deadlines results in penalties and interest depending on the deadline not complied with.Note: The rate is determined by the Minister of Finance through a decree and it is applicable for the whole year. The rate for 2010was set at 5,35%. From 1 January 2011 the rate is set at 5%. 7 Elia House, 77 Limassol Avenue, 2121 Nicosia, Cyprus, Tel. No.: +357 22418888 Fax. No.: +357 22418890 E-mail: info@aspentrust.com; www.aspentrust.com
    • NewsletterLegal diary Registrar of Companies in CyprusSections 121,125 and In accordance with the provisions of Section 121,125 and 152 of the Companies Law,152 of the Companies Cap 113,as amended every company registered in Cyprus, is under an obligation to holdLaw, Cap 113, as an Annual General Meeting (AGM) approving the company’s accountsamended 125.(1) Every company shall in each year hold a general meeting as its annual general meeting in addition to any other meetings in that year, and shall specify the meeting as such in the notices calling it; and not more than fifteen months shall elapse between the date of one annual general meeting of a company and that of the next: Provided that, so long as a company holds its first annual general meeting within eighteen months of its incorporation, it need not hold it in the year of its incorporation or in the following year. The Board of Directors Resolution approving the company accounts must be held 7 days before the AGM Notice is sent to the Shareholders. The AGM Notice must be sent at least 21 days before the AGM is to take place. st th For companies incorporated between 1 of January and 30 of June – AGM must be held st by 31 December of the current year. st st For companies incorporated between 31 of July and 31 of December – AGM must be st held by 31 December of the next year. Every company having a share capital shall, once at least in every year make a return (submit HE32 Form to the Registrar of Companies) with respect to the registered office, registers of members and debenture holders, shares and debentures, indebtedness, past and present members and directors and secretary.Section 118 of the The HE32 Form submission date is 14 days after the AGM/Minutes date.Companies Law, Cap The Registrar of Companies in Cyprus does not accept HE32 forms which are not113, as amended accompanied by the relevant audited accounts.Non compliance with the above deadlines results in penalties imposed by the Registrar of Companies in Cyprus. Companies Annual LevyOn the 26th August 2011, the Cyprus Parliament voted the first package of austerity measures. A number ofamendments were made to various legislations with the aim of raising revenues and decreasing Governmentspending in order to avoid entry into the support mechanism.The areas affected by these amendments include taxes, levies for companies incorporated in Cyprus, theintroduction of contributions to the pension schemes of Government employees and semi-governmentalorganisations, and a levy for two years on the salaries and pensions paid to employees of those in the publicsector.An annual levy of €350 is imposed on all Cyprus companies, payable to the Registrar of Companies. For group ofcompanies, a maximum limit of €20,000 is set. For 2011 the levy was due by 31st December 2011. For allsubsequent years the levy must be paid by 30th June. The companies which are registered starting with 2011 willpay the annual fee starting with the next year. This is to say that companies registered in 2011 will pay the firstannual fee by 30 of June 2012 and the companies which will register in 2012 will pay the first annual fee by 30 ofJune 2013. Companies exempt from paying the levy are those which are dormant, have no assets or those whichown property located in the non Government controlled areas of Cyprus.Failure to pay the levy on time will result in the following penalties: Payment Penalty Within two months of the due date 10% Between two and five months of the due date 30% Overdue by five months Company is removed from registryThe fee for returning the company to the registry within two years is €500 per annum and thereafter €750 perannum. 8 Elia House, 77 Limassol Avenue, 2121 Nicosia, Cyprus, Tel. No.: +357 22418888 Fax. No.: +357 22418890 E-mail: info@aspentrust.com; www.aspentrust.com