miércoles, 7 de diciembre de 2016

Cyprus amends tax law, affecting permanent establishments and intellectual property

The Cyprus Parliament on October 14, 2016, passed the following amendments to the Cyprus Income Tax Law (ITL):

  • An election to be taxed on profits earned by foreign permanent establishments (PEs), with a tax credit available for foreign taxes incurred. The exemption method will remain the default method in the absence of such an election.
  • Introduction of a new Cyprus intellectual property (IP) box. The new IP box retains the 80% deduction from the initial (‘old’) Cyprus IP box. According to the Cyprus tax authorities, the new IP box will be fully aligned with the Organization for Economic Co-operation and Development’s (OECD’s) Base Erosion and Profit Shifting (BEPS) Action 5 report.
  • Closure of the old Cyprus IP box with transition rules applicable through June 30, 2021.
  • Introduction of tax amortization for all types of business-use intangibles, excluding goodwill and IP that falls under the old IP box transition rules, which continues that box’s tax amortization.

The amendments will be effective July 1, 2016, once they are published in the Cyprus Government Gazette.

Source & more info: PwC

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