“Substance” is a well-known tax concept used in cross-border tax structuring. The term “substance” does not appear in the actual text of double tax treaties (DTTs).
Cyprus-Russia – Thin Cap Rules
The Russian courts issued a decision on 6 March 2018 (case OJSC SUEK-Kuzbass) on the application of the Double Tax Treaty between Cyprus and Russia of 1998 as amended in 2010 (the ‘DTT’). Based on the decision interest expense was considered as non-tax deductible in accordance with the Russian thin capitalization rules.
Tax framework for newly established tax residents
Personal taxes and contributions – The main types of direct taxes applicable to an individual in Cyprus are:Income tax; Special defence contribution on dividend, interest and rental income; Capital gains tax on gains from the sale of real estate situated in Cyprus
VAT rules for the leasing of yachts is incompatible with the EU VAT Directive (2006112)
On 8 March 2018, the European Commission (EC) decided to send letter of formal notice to Cyprus. The EC held the view that the Cyprus VAT rules for the provision of yachts is incompatible with the EU VAT Directive (2006/112)