The Cyprus Department of Taxation has published the rates applicable for the 10 year government rate of each state, which once increased by 3%, constitutes the reference rate for the purposes of the Cyprus Notional Interest Deduction (NID) for the year ended 2019.
Cyprus 2019 NID Rate in practice means that the maximum allowable deduction shall be equal to the reference rate of the jurisdiction of the asset.
Referring back to the initial publication on the Cyprus Notional Interest Deduction (NID) the calculation would be as follows when considering the Cyprus 2019 NID Rate:
|#||NID Calculation||Asset 1 €m||Asset 2 €m||Asset 3 €m||Total €m|
|2||NID [New Equity x reference Rate]||4.7||6||4.6||15.3|
|3||Taxable profit after deduction direct and apportioned indirect expenditure||10||5||12||27|
|4||NID Cap (80% of the taxable profit [80% x (#3)]||8||4||9.6||21.6|
|5||Deductible NID for each asset [lower of (2) and (4)]||4.7||4||4.6||20.2|
|6||Taxable profit [(#3)-(#5)]||6.8|
The scenario above takes into account the Cyprus 2019 NID Rates. A hypothetical investment into India, South Africa and Russia and a varied rate of return per investment.
Cyprus 2019 NID Rates
|Isle of Man||1.712||2.305|
|Kazakhstan ( € )||0.966||2.463|
The reference rates above mentioned are extracted from the Cyprus Tax Departments publication. You may access them by following the above link.
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Relevant Tax Publications
Publications on Cyprus Business Law
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