In brief
On 3 December 2020 amendments to the provisions of the Cyprus tax legislation were approved by the Cyprus Parliament for extending the application of the debt restructuring provisions to 31 December 2021.
In detail
On 3 December 2020 the Cyprus Parliament voted for the extension of relevant tax provisions of the Cyprus tax legislation with respect to the debt restructurings.
The debt restructuring provisions allow for certain tax relief incentives for transactions which involve the transfer of Cyprus immovable property by a borrower (the definition of "borrower" has been extended recently to include any related person to the primary borrower) and/or debtor and/or guarantor to a qualified lender.
The relevant tax relief incentives entered into force on 31 December 2015 for an initial period of two years to 31 December 2017, and have already been extended twice, with the second extension being to 31 December 2020.
The current third extension to 31 December 2021 relates to the below tax laws:
- The Income Tax Law;
- The Special Defence Contribution Law;
- The Capital Gains Tax Law;
- The Stamp Duty Law;
- The Collection of Taxes Law;
- The Department of Lands and Surveys (Fees and Charges) Law;
- The Value Added Tax Law
The extension was published in the Government Gazette on 15 December 2020.
The takeaway
The said extension is expected to facilitate further loan restructurings of non-performing debts.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.