The Double Tax Treaty (DDT) between The Republic of Cyprus and the Kingdom of Bahrain entered into force in January 2017. The DTT is based on the OECD Model Convention for the Avoidance of Double Taxation on Income and Capital with the aim to help attract foreign direct investment to Cyprus.

Cyprus as an attractive location for foreign Investment

The aim of the agreement was to enhance and increase the trading aspect and attract foreign investment for Cyprus to be promoted as an international business center which will provide further growth.
 

Cyprus and Brahrain Taxes

Cyprus taxes include:

• Income tax.
• Corporate Income Tax.
• Special contribution of defence.
• Capital Gain Tax.

Bahrain tax includes:

• The Tax Oil Tax.

Provisions of the Treaty

The important provisions of the treaty are:

• No withholding taxes on payments of dividends.
• No withholding taxes on payment of interest.
• No withholding taxes on payment of royalties.
• For capital gain tax, the profits will be taxed in the country that the property is situated.
• If a project is concluded in more than 12 months (a project being a building site/ construction/ installation of a project or any other related project) then this will be considered as a permanent establishment.
• Business profits will be taxable in the country that the Company resides.

Contact

Chloe Ralli
General Manager
chloe.ralli@whitenovember.com
Tel: + 357 2200 7940

On 13^th April 2017, the Parliament of Ukraine approved the Convention and Protocol between Ukraine and Malta on “Avoidance of Double taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income”, signed in Kyiv on 4^th September 2013.

The Convention provides the following rates of taxation in line with the OECD Model Tax Convention:

• Dividends – 15% or 5%: reduced tax rate applies if the dividend recipient owns at least 20% of the capital of the dividend paying company
• Interest and Royalties – 10%

The President of Ukraine shall be signing the Convention and Protocol, whilst enforcement shall enter into force after a mutual notifications by both states.

Contact us

Amy Fenech Zarb
Senior Corporate Administrator
amy.fenech.zarb@whitenovember.com

+356 2010 4000

The programme of Cypriot “Startup Visa” (Startup Permit Scheme) was introduced in February 2017 and will operate till February 2019. The 2 year pilot programme shall attract talented entrepreneurs from third countries (outside EU and EEA). The programme consist of two parts: individual and team.

This Scheme is applicable to following under below mentioned conditions:

1. Individuals as Non-EU country nationals who:

• Is the only founder and meets the requirements of the enterprise below.
• Has access to €50.000, which may include venture capital funding, crowdfunding or other sources of funding.
• Holds an undergraduate degree or an equivalent professional qualification.
• Has very good knowledge of the Greek and / or English language.

2. Teams consisting of Non-EU country nationals:

• Comprise solely of founders that meet the requirements of the enterprise below and are of a maximum number of 5 individuals or, of at least 1 founder and other senior executives that their total does not exceed 5 individuals.
• The senior management must belong to the third level of the administrative hierarchy (managers) (C – level employees) and will have the right to stock options. Possess, in total, more than 50% of the company’s shares.
• The founder has access to € 25,000. In case the founders are more than 2 the total capital must be €50.000 which may include venture capital funding, crowdfunding or other sources of financing.
• At least one of the team members holds an undergraduate or an equivalent professional qualification.
• All team members have a very good knowledge of Greek and / or English language.

Requirements of the Enterprise:

The enterprise must be innovative. The enterprise will be considered as innovative if its research and development costs represent at least 10% of its operating costs, in at least one of the three years preceding the submission of the application, as certified by an external auditor, on the basis of international accounting standards. In the case of a new enterprise without any financial history, the evaluation will be based on the Business Plan submitted by the applicant. The Business Plan must provide that the enterprise’s head offices and tax domicile be established in Cyprus. The head offices may be common co-working spaces (e.g. business accelerators, incubators, digital hubs etc.) or co-location with other enterprises.

Contact us for the application procedure details.

Source

Towards the end of the sixties one very famous Italian performer, Domenico Modugno, was singing ‘Meraviglioso’, which was saying “[…] but look around you/ gifts that have made you / They have invented the sea / You say ‘I have nothing’/ It seems nothing the sun? […]” and this song seems to be deeply related to the beauty of living in the so called “Bel Paese”, that is to say, Italy.

How beautiful, how wonderful indeed, would be to live in such a beautiful Country, surrounded by art, friendly people and lovely villages, without forgetting the bonus of staying in the homeland of the best food in the world and completed – like a cherry on a cake – by a temperate weather?

New guidelines on setting a residency in Italy

It is a very recent news, that one that was published in the “Gazzetta Ufficiale Italiana” during January 2017, and clarified with the document about ‘Revenue Measures’ of the 8th of March, that establishes, the requirements and the guidelines in order to set the residency in Italy.

This new measure outline the possibility to move the tax residency in Italy, upon the payment of a flat rate of 100,000 Euro on incomes produced abroad (those produced in Italy would be taxed at normal rates). The application of this new regime is not only optional, but there is no need, for the applicant, to declare the amount of the foreign income or capital.

The new resident would be fully equated to other taxpayers in Italy, thus subject to the fact that – to be considered resident in Italy – the individual shall linger in the Country more than the half of the tax year.

Furthermore, in the case in which the individual would like to move with its family, there would be the possibility of benefitting of another additional flat rate of EUR 25,000 to compute with the principal tax, in order to register any relative of the main taxpayer.

Main requirements

As main requirements, we can definitely mention:

• the applicant should not have been resident in Italy for the past 9 years
• the supply of personal and identity-related records
• the indication of the previous jurisdiction/s in which the individual had the last tax-residence

Once the application would be approved (even with silent consent), the individual can benefit of this flat rate for the next 15 years.

As conclusion, even if it is always important to underline that every individual situation should be carefully analysed, we can say – with no doubt – that finally Italy took the field with other tax-friendly countries for high wealth individuals, such as Portugal or Malta.

Contact

Simona Angotzi
Corporate Administrator
simona.angotzi@whitenovember.com

Simona Angotzi is a Corporate Officer in White November Group Corporate Department.

As from the 1st January 2017 The Authority for Transport Malta introduced new provision that allows yachts, which are registered for pleasure use, to carry more than 12 people (excluding the crew) without being compulsively submitted to the Convection for the Safety of Life at Sea (SOLAS) or the Passenger Yacht Code (PYC).

Previous Legislation

The previous Legislation stated that the private yacht capacity corresponded to the amount of 12 passengers on board. The only exception to this limit was in the case in which the yacht would had been under construction according to SOLAS and PYC regulations and registered with the Red Ensign Flag.

New Legislation

These new guidelines draw a set of requirements for pleasure yacht, to be able to carry more than 12 people, and they complement the Commercial Yacht Code introduced in 2010 (latest version dated 2015):

• Issued with a valid Class certificate (requirement applicable for yachts of more than 500 gross tonnes);
• Compliance with the requirements of the Malta Commercial Yacht Code;
• Possession of an approved Stability Booklet, which defines the loading conditions being requested;
• Install and carry the appropriate safety equipment depending on the expected number of person on board;
• Carry 100% life raft capacity;
• Carry a crew compliment in line with the Malta Commercial Yacht Code;
• Issuance of a Safety Radio Statement of Compliance for yachts of more than 300 gross tonnes and a Safety Radio Certificate for yachts of more than 500 gross tonnes;
• Comply with the International Convention for the Prevention of Pollution from Ships (MARPOL) requirements as detailed in the Malta Commercial Yacht Code; and
• Navigation restricted within 150 nautical miles from safe haven.

Furthermore, the law requires an intermediate survey to be effected every two and a half year, for all those yachts who obtain the permission to carry more than 12 people. The aim of this test is to verify the constant compliance with the minimum requirements.
 

This new set of guidelines will – with no doubt – consolidate Malta’s position as the largest registry in Europe and as one of the strongest in terms of reputation.

Contact

Simona Angotzi
Corporate Administrator
simona.angotzi@whitenovember.com
 
Simona Angotzi is a Corporate Officer in White November Group Corporate Department.

The Cyprus Tax Authority decided to change the current tax regime in relation to profit margins and loans between related parties.
 

Whom does the change apply to?

From the 1st of July 2017 all loans between Cyprus Tax Resident Companies and their related parties shall be supported by transfer pricing studies prepared by an independent expert and based on OECD principals. The new rule will affect financial transactions between related companies with regards to tax assessment and tax ruling.

In June 2016, the UK HM Treasury concluded the consultations on the proposal to change the limited partnership legislation for private investment funds. The new regime is fully operational and ready to be applied.

The intention of the changes was to amend the Limited Partnership Act 1907 (the “1907Act”) and to facilitate and streamline the approach of current legislation to private funds, and to transform the limited partnership into more appealing structure for asset managers. (more…)