Amendments to the Procedure for Affixing Stamp Duties on Agreements, Effective from 27.07.20 Onwards

The Tax Department has recently announced amendments on stamp duties on any Agreements between two legal entities, Real Estate Lease Agreements, Employment Agreements and Contracts with a specific contract value, such as Sale-Purchase Agreements, Loan Agreements etc., effective as from 27.07.20.

The new procedure applies strictly to the initial agreement and not to any addendum or additional agreements, and it provides that the person, who wishes to have an agreement stamped, shall follow a prescribed procedure, which the Tax Department has recently published online and described below.

The new procedure

The Tax Department has published in their website a manual in excel format, which provides information on the accurate calculation of the required stamp duties. This manual can also be found at the following link:

https://www.mof.gov.cy/mof/tax/taxdep.nsf/All/F1ACCBC32EEA7980C22585BD0038D6A0?OpenDocument

Stamp duties not exceeding €100

The stamp duty is payable within 30 days from the day of signing of a document.

Interested parties shall:

  1. Calculate the stamp duties payable according to the above-mentioned manual.
  2. Send to the Tax Department, via email, the relevant ‘Calculation of Stamp duties’ form.
  3. Purchase the stamp duties from approved representatives (who are listed on the Tax Department’s site).
  4. Affix and cancel the stamp duties with the same procedure that applies to fixed stamp duties – further information can be found on the Tax Department’s website.

Stamp duties exceeding €100

Interested parties shall:

  1. Calculate the stamp duties payable according to the relevant manual published by the Tax Department.
  2. Print out the relevant ‘Calculation of Stamp duties’ form and submit it to the authorities for the payment of stamp duties.
  3. Present before the authorities the receipt of payment together with the agreement/document upon which the stamp duties will be affixed, so that they are cancelled.

The content of this article is intended to provide a general guide to the subject matter and does not constitute legal advice.

For any additional information, please contact us at [email protected] or +357 22 42 11 90.

Changes to the Cyprus Investment Programme as of 18th of August 2020

The Council of Ministers has adopted on the 18th of August 2020 new rules for the Cyprus Investment Programme (‘the Program’). The new regulations are as follows:

  • A “Supervision and Control Committee” has now been established for regulating and monitoring the services provided by the registered service providers of the Cyprus Investment Programme. The Committee shall consist of the General Director of the Ministry of Interior, the General Director of the Ministry of Finance and the Representative of the Cyprus Investment Promotion Agency or their Representatives holding managerial positions, as well as experienced and trained administrative staff.
  • A “Naturalizations Control Unit” is also established and shall be responsible for the ongoing examination of the citizenship applications, the compliance of all applicants with the applicable regulations as well as the administration and overseeing of the Program.
  • Detailed provisions were also introduced for the counselling and control of the registered service providers to ensure compliance with the applicable regulations as well as code of conduct.
  • The total amount of the required donations was increased to €200,000, out of which €100,000 must be donated to the Cyprus Land Development Corporation and the remaining €100,000 to one of the below:
  • The Research and Innovation Foundation; or
  • The Industry and Technology Service; or
  • The Fund for Renewable Energy Sources and Conservation of Energy; or
  • The National Solidarity Fund.
  • It is highlighted that the investment funds must come from the Investor’s personal account or the Investor’s company/ies based and operating abroad.
  • It is also noted that the investment of funds for the formation and/or establishment of a land developing company is not acceptable anymore.
  • Investments through incorporation or participation in Cyprus companies and/or corporations and/or businesses based on an investment plan is still a qualifying investment provided that such entities have their physical presence and operations in Cyprus. Moreover, substantial activity and significant turnover must be proved, and the number of minimum Cypriot or European employees has been increased to 9 (Nine).
  • The validity of the applicants’ Clean Criminal Record has been increased from 3 months to 6 months from the date of issuance.
  • The eligibility of the Investors and their family members is now subject to certain exceptions. Applicants falling in any of the below categories are not eligible to apply for the Program:
  • politically exposed persons (PEPs) – it specifically applies only to PEPs holding such a position at the time of their application or within the 12 months prior to the submission of their application;
  • applicants subject to criminal investigation either in Cyprus or abroad at the time of their application and/or applicants convicted of serious criminal offences. In both cases it shall apply only to criminal offences punishable with imprisonment of 5 years or more;
  • applicants who are connected with natural or legal persons that are included in the Restrictive Measures Lists of the EU and/or applicants that they were connected (at the time of such inclusion in the List) with natural or legal persons who are included in the Restrictive Measures Lists of the European Union;
  • applicants who are connected with natural or legal persons that are included in the Sanctions Lists of the European Union and/or applicants that they were connected (at the time when such sanctions were imposed) with natural or legal persons who are included in the Sanctions Lists of the European Union;
  • applicants who are connected with natural or legal persons that are included in the Restrictive Measures Lists of either the European Union or the United Nations, against whom such Restrictive measures remained valid for a period ended up to 12 months prior to the submission of their application;
  • applicants who are included in the “Wanted List” of EUROPOL or INTERPOL; and
  • applicants of whom the estate was seized within the borders of the European Union.
  • The application/s of the Investor’s family members can now be submitted either at the same time with the Investor’s application or at any time after the submission of the Investor’s application.
  • It is provided that the parents of the Investor or the parents of the Investor’s spouse, as the case may be, could submit the citizenship application provided that they purchase a residential property of minimum €500.000 (without VAT).
  • It is emphasized that citizenship may be revoked if any of the economic criteria and/or requirements of the Program are no longer satisfied.

The content of this article is intended to provide a general guide to the subject matter and does not constitute legal advice.

For any additional information, please contact us at [email protected] or +357 22 42 11 90.