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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
1 New Equity 50 50 50 150
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

State 31/12/2019 31/12/2018 31/12/2017 31/12/2016 31/12/2015 31/12/2014
Abu Dhabi 2.514 2.302
Dubai ($US) 3.160 4.722 4.402
Isle of Man 1.712 2.305
Taiwan 0.670
Egypt 13.518 17.990
Egypt($US) 6.382 8.271
Argentina 10.253 5.669
Armenia 8.064 6.385 9.251
Austria 0.016 0.484 0.563
Belgium 0.086 0.768
Bulgaria 0.257 0.966 0.750
France 0.115 0.705 0.780
Germany -0.210 0.284 0.423 0.204 0.568 0.540
Switzerland -.454 0.197
Greece 1.431 4.346 4.073 8.361 9.639
USA 1.919 2.685 2.406
UK 0.817 1.275 1.188 1.326
India 6.557 7.261 7.571 6.878 7.7758 7.860
Ireland 0.120 1.166 0.811
Spain 0.463 1.134 1.558
Israel 0.960 2.320
Israel ($US) 2.520 3.900
Italy 1.404 2.739 2.005 1.930 1.847
Kazakhstan ($US) 2.566 4.232 4.204 5.311
Kazakhstan ( ) 0.966 2.463
Canada 1.699 1.965 2.079
Kenya 12.180 9.350
China 3.130 3.261 4.268
Croatia 0.621 2.415 2.453
Cyprus 0.536 2.302 1.881 3.489 3.685 5.037
Latvia 0.136 1.029 0.715 0.894 1.104
Belarus ($US) 5.350 7.226 5.946
Lithuania 0.169
Luxembourg -0.087 0.522 0.637
Maroco 2.420
Norway 1.540 1.754 1.579
South Africa 9.018 9.206 8.780
The Netherlands -0.060 0.383 0.501
Hungary 2.017 2.971 2.031
Ukraine ($US) 6.504 10.780 7.222 8.705 9.622
Poland 2.109 2.812 3.385 3.627 2.937
Romania 4.398 4.811 4.314 3.748 3.703 3.570
Russia 6.270 8.720 7.590 8.380 9.570 13.730
Russia ($US) 2.605 5.020 3.822 4.409 6.600 6.580
Saudi Arabia 2.778 4.722
Serbia 2.778 4.722 5.968
Singapore 1.730 0.789 0.815
Slovakia 0.192 0.789 0.815
Slovenia 0.267 1.166 0.843
Sweden 0.145 0.457 0.540
Czech Republic 1.569 1.884 1.650 0.414 0.499
Finalnd 0.043
Honk Kong 1.699 1.946 1.754

The reference rates above mentioned are extracted from the Cyprus Tax Departments publication. You may access them by following the above link.

Harris Sharpe

Harris Sharpe

Harris Sharpe

Author – Photographer

For many years he has worked and devoted his skills and efforts towards building a successful career as a leading executive. From humble beginnings, his aim has always been to yield results; with a keen focus to attention to detail and client satisfaction. His experience has always been varied and not specific, at times he preferred it. With that in mind, he has dealt with CySEC on licensing and ongoing regulation, international private equity and credit fund managers, NASDAQ and NYSE listed companies occasional millionaires as well as self-made millionaires. His passion though is difficult transaction work organizing and deploying people for a common goal. Harris enjoys reading and studying the Cyprus law and sharing that information on this website.

Relevant Tax Publications

Cyprus Kazakhstan Tax Treaty

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Publications on Cyprus Business Law

Cyprus Annual Return HE32 for Companies

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Company Migration to Cyprus

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