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WHY CYPRUS: UNPARALLELED BENEFITS FOR THE “NON-DOM” STATUS HOLDER
  • 24 April 2025
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THE NON-DOM REGIME FOR HIGH-NET-WORTH INDIVIDUALS IN CYPRUS HOLDS NO TAXATION ON INTEREST & DIVIDENDS

Effective as of April 2025, the recent abolishment of the non-UK domiciled tax regime, leaves UK -based High-Net-Worth Individuals on the look out for alternative tax residency options. Where does that leave us with?

Since 2015, Cyprus constitutes an ideal location for taxation of worldwide income for HNWIs who transfer their tax residence to the famous island. With the unique beneficial status of an EU member in combination with a Commonwealth state, as an ex British colony, Cyprus holds jurisdiction within the EU and is judiciary similar to the UK in terms of company legislation and assurance standards. Holding a large network of double-taxation treaties with more than 60 countries, U.K included, Cyprus boasts a sophisticated business destination. Furthermore, HNWI’s turn to Cyprus for its tax friendly incentives, available to companies and individuals for an overall lower tax burden compared to other EU jurisdictions, on top of highly competitive corporation tax rates at 15% (for MNEs and large domestic groups with annual consolidated revenues exceeding €750 million), standing as one of the lowest tax rates in Europe and certainly lower to the UK’s current corporation tax rate of 20%.

On top of being a tempting business destination for its tax – schemes, Cyprus has plenty of additional advantages to offer, such as wide availability of a highly qualified and expertly educated work force that is fluent in English, low operational costs, strategic location connecting it with three key continents, under a stable European economy. The individuals themselves can enjoy a low cost of living and doing business, combined with high quality of life, education and a national healthcare system at EU standards.


In order to benefit from the Cypriot Non-Dom regime, and to transfer one’s tax residence to the Republic of Cyprus,
individuals and companies must meet the following criteria for the same tax year (1/1-31/12): 

• Spend 60 days minimum in Cyprus (not necessarily consecutive)
• Spend no more than 183 days in any other country,
• Are not tax residents of any other country,
• Maintain a permanent home in Cyprus (owned or rented).
• Hold a business, are employed, or hold office in a company registered in Cyprus until minimum the end of that year.


Side note to the above:
• An individual can be considered as a Cyprus tax resident, after spending more than 183 days in Cyprus during a calendar year.
•  The Cyprus Tax Authorities may also issue a tax residency certificate, even during the tax year, to qualifying individuals upon request.

 

The present article is for informational purposes only and does not, under any circumstances, constitute legal advice.
For further information on the subject, please contact our law firm and one of our attorneys shall be glad to assist you.

 

Nika Kalifatidou
Advocate – Legal Consultant
Managing Partner
T.K. & Associates Law Firm

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The new Cyprus tax reform proposal: a new era for Cypriot tax residents
  • 24 April 2025
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In an attempt to enhance the efficiency of tax policies in Cyprus, on February 26th of 2025, the President of the Republic of Cyprus, in cooperation with the Economic Research Centre of the University of Cyprus, presented a tax reform proposal which is expected to have a strong fiscal impact both on physical persons as well as legal entities who are tax residents in the country. The reform proposal shall initially undergo public consultation which shall be followed by the elaboration of the relevant legislation, which shall then be submitted to the House of Representatives by the Ministry of Finance for voting. Once approved, the legislation shall enter in vigour, partly as of 2025, while in whole it is expected to be in full effect in 2026.

 

The main elements of the proposals include
but may not be limited to the following:

 

  • Corporate Taxation:

The first, most striking amendment introduced, is the increase of the corporate income tax rate from the famous 12.5 to 15% for all legal entities. Such measure was suggested in an attempt to align Cyprus taxation with the other EU member states and the OECD’s global tax guidelines.

Furthermore, companies shall be able to follow through with procedures of tax losses incurred within a timeframe of 10 fiscal years instead of the current five-year period allowance. This amendment can turn out to be very beneficial for the legal entities, as the mechanism enables such losses to be offset against future taxable income or even profits of another company belonging to the same group of companies, provided that all legal entities involved are tax residents of the Republic of Cyprus.

In addition, the 1.5% insurance premium tax is expected to be abolished, while new anti-abuse rules are expected to apply for close-structured legal entities.

Profits derived from cryptocurrency trading shall also be taxed in the event that they are perceived as revenues.

On the other hand, the reform proposal does not suggest any amendments in departments of tonnage tax regime within the shipping domain, dividend exemptions, exemptions on sales of shares and/or other securities, notional interest deduction rules on corporate quite and provisions on the IP Box regime.

 

  • Personal Income Tax:

The reform proposal suggests an increase in the tax-free threshold which would be at the rate of 20.500 euros per annum, as opposed to the current 19.500-euro rate. Moreover, the current scale of progressive taxation on personal income which can reach a maximum level of 35% and currently applies to sums exceeding the 60.000 euros would hereinafter apply to sums exceeding the 80.000 euros of personal profits. On the other hand, progressive taxation rates of 20%, 25% and 30% would apply to intermediary bands in the following manner:

 

Taxable income

  Tax rate   

Up to €20,500

0%

  €20,501 — €30,000

20%

€30,001 — €40,000

25%

€40,001 — €80,000

30%

Over €80,000

35%

 


Eligibility for personal allowances that would benefit specific categories of individuals such as:

  1. Families with dependent minor children or non-emancipated children who are students, provided that certain conditions are fulfilled;
  2. Physical persons with a housing loan on their primary residence or payments of rents;
  3. Families who would proceed to green-household upgrades of their residences.


Further taxation benefits would concern the following cases:

  1. Lower taxation rates for stock options, subject to certain conditions and anti-abuse rules;
  2. Ex gratia payments, such as voluntary payments of an employer to their employees, would be taxable if exceeding a threshold amount, while the employer would benefit from a full deduction of such expense;

Considerable payments of employer to desired recruits, such as the “golden hellos” or otherwise known as “handshake amounts” would be subject to taxation to the employees, while for the employer such amounts would be considered as deductible expenses;

Cultural donations shall also be subject to deductions;

The 60-day tax residency rule of Cyprus would become more flexible in terms of including physical persons whose centre of business interests is located in the Republic of Cyprus, regardless of their physical presence on the territory;

No amendments are expected to be made to the 50% tax exemption on employment income for first employment in the Republic of Cyprus.

 

  • Capital Gains Tax:

The current provisions of the legislations, which refers to the sale of real estate property in the Republic of Cyprus or the sale of companies which directly or indirectly own real estate properties in the country, shall remain in vigour but modernizations shall be applied.

 

  • Special Defense Contribution (SDC):

The current legislation would be amended in the following manner:

  1. Abolition of the SDC on rental income;
  2. SDC rate on dividends would be reduced from the current 17% to 5% for tax residents and individuals domiciled in the Republic of Cyprus;
  3. Lifting of corporate veil. Anti-abuse rules are expected to be introduced for disguised dividends, as tax authorities may reclassify shareholder income as direct business income;
  4. The non-dom status for physical persons would remain for a timeframe of 17 fiscal years, while an extension of such time period might be offered with the imposition of an annual fee.

 

  • Stamp Duty:

With the new legislation stamp duty is expected to be limited to agreements regarding immovable property, banking and insurance undertakings.

 

  • Incentives regarding Green Transitions and Digital Transformations:

The newly proposed tax reform presents several measures for investments into the green transition and digital transformation sectors accordingly:

  1. Significant tax deductions on expenses and/or capital allowances;
  2. Important tax deductions for upskilling and retraining corporate staff;
  3. Accelerated depreciation for eco-friendly and high-tech investments;
  4. Deficits produced by the aforementioned measures would be extended without restrictions. Specifications are expected to be presented in the following months.

 

The new tax reform proposal is expected to be finalized by the end of 2025. Some of the new tax initiatives which shall be adopted may have a retroactive effect and apply from the beginning of the fiscal year 2025, while others are expected to enter in vigor from the beginning of the fiscal year 2026.

 

The present article is for informational purposes only and does not, under any circumstances, constitute legal advice. For further information on the subject, please contact our law firm and one of our attorneys shall be glad to assist you.


Nika Kalifatidou
Advocate – Legal Consultant
Managing Partner
T.K. & Associates Law Firm

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The approval of a political agreement on the introduction of a European Anti-Money Laundering Authority.
  • 16 December 2023
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The continuous battle of the European Commission against money laundering and terrorist financing within the EU has been widely known over the past years. In fact, back in May 2020, an Action Plan had been set in place for the proper implementation of the AML/CTF framework, by reinforcing the legal framework and by proposing back in July 2021 the introduction of a new authority for the assistance and supervision of Member States in such procedures.

 

On December 13th of 2023, the Commission approved the provisional agreement which was reach between the European Council and the European Parliament regarding the Commissions’ initial proposal for the establishment of an EU anti-money laundering and countering terrorism financing Authority, hereinafter referred to as AML/CFT in the form of a decentralized EU regulatory agency, hereinafter referred to as AMLA. The newly introduced authority shall coordinate and regulate the cooperation among Financial Intelligence Units (FIUs) and control the lawful and proper application of the EU rules. AMLA shall provide direct supervision over the national financial entities and assistance to FIUs for the enhancement of their analytical capacity in terms of illicit flows, prioritizing financial intelligence and cooperation among Member States, In terms of reporting and exchange of information, as well as joint operational analyses and the hosting of the central online system within the EU.

 

The AMLA legislative packaged proposed by the European Commission also contains a draft of a new Regulation on the functioning of the AML/CFT, as well as a new AML/CFT Directive, which are to this date under discussion. The procedure is expected to be finalized and AMLA to be formally established, once the agreement is officially adopted by the European Council and the European Parliament and its’ members. In addition, the domicile of the AMLA is still under discussions.

 

The present article is for informational purposes only and does not, under any circumstances, constitute legal advice. For further information on the subject, please contact our law firm and one of our attorneys shall be glad to assist you.

 

Nika Kalifatidou

Advocate – Legal Consultant

Managing Partner

T.K. & Associates Law Firm

 

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ETIAS: The new European Travel Information and Authorisation System Explained.
  • 7 November 2023
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On September 12th of 2018, The European Parliament along with the European Council established a European Travel Information and Authorisation System, hereinafter referred to as ETIAS, by introducing Regulation (EU) 2018/1240 as well as Regulation (EU) 2018/1241 amending Regulation (EU) 2016/794 for the purpose of establishing ETIAS. Such measures were taken in order to provide a stronger security control at the boarders and ensure safety within the Schengen Area, by reducing the possibility of potential threats.

First and foremost, it is important to understand what ETIAS really is; it consists of an automated IT system designed to identify potential security and/or migratory risks deriving from Non-EU visa-exempt travelers to the Schengen area. The ETIAS travel authorisation constitutes an entry requirement for such travelers and is linked to their passport, with a validity for up to three (3) years or until the expiration date of the passport in use. ETIAS grants but does not guarantee multiple entries to thirty (30) European countries, for short-term stays which cannot exceed the timeframe of ninety (90) days within a period of a hundred and eighty (180) days. The entry is not guaranteed as upon approaching the border, officers shall review the traveler’s passport and other documents for the verification of entry conditions. In the event a request for entry is refused, the individual concern is entitled to appeal.

The countries which shall require the ETIAS travel authorisation are the EU Schengen Member States, Member States of the European Free Trade Association (EFTA), European Microstates with Open Borders and Future Schengen Member States.

The objectives of the introduction of this European Travel Authorisation are the following:

  • Effective management of border controls;
  • Increased security;
  • Prevention of illegal immigration;
  • Protection of public health;
  • Prevention, detention and investigation of terrorist offences and/or other serious crimes;
  • Improvement of the Schengen Information System.

While ETIAS aims to enhance security within the Schengen Area and prevent potential migratory threats, the new travel authorisation has been created in such way that it can operate all necessary controls while safeguarding all fundamental rights and data privacy in compliance with the GDPR regulations. The IT system is being developed by the European Union Agency for the Operational Management of Large-Scale IT Systems in the Area of Freedom, Security and Justice and it is expected to be launched in 2025.

 

The present article is for informational purposes only and does not, under any circumstances, constitute legal advice. For further information on the subject, please contact our law firm and one of our attorneys shall be glad to assist you.

 

Nika Kalifatidou

Advocate – Legal Consultant

Managing Partner

T.K. & Associations Law Firm

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The importance of consent in the scope of personal data protection.
  • 25 September 2023
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In times when the term “personal data” has been widespread both in the media, as well as the corporate world, perhaps it might be a brilliant opportunity to remember what it actually means in legal terms, and why is it so important. Pursuant to the Charter of Fundamental Rights of the European Union in its’ article 8(1) and the Treaty on the Functioning of the European Union (TFEU) in its’ article 16(1), personal data protection of all physical persons, regardless of their nationality or residence, is a fundamental right. Therefore, the General Data Protection Regulation of the EU, Regulation (EU) 2016/679,   aims to protects such rights, securing justice, safety and the well-being of all individuals. While the protection of personal data is a fundamental right, it does not constitute an absolute right, as it must be balanced against other fundamental rights as well as its’ function within the society, in line with the principle of proportionality. Due to the acceleration in technological advances and globalization, the collection and sharing of such sensitive information has increased, requiring as a result stronger legal protection of this fundamental right, where individuals can have control over their personal data, by giving their “consent” whenever appropriate for such processing.

According to the definitions, as explicitly laid out in paragraph 11 of article 4 of Regulation (EU) 2016/679 of the European Parliament and of the Council, as published in the Official Journal of the European Union on April 27th of 2016, consent is defined as “any freely given, specific, informed and unambiguous indication of the data subject’s wishes by which he or she, by a statement or by a clear affirmative action, signifies agreement to the processing of personal data relating to him or her”.  Moreover, for the consent to be considered to be valid, in accordance to article 4 and article 7, the following prerequisites must be fulfilled:

  1. The consent must be given freely; the subject must be able to refuse or withdraw his/her consent without the risk of being at disadvantage;
  2. The consent must be informed;
  • The consent must be given for a specific purpose;
  1. All reasons for processing must be clearly stated;
  2. The consent must be explicit and given via a positive act;
  3. The language used must be clear and plain and clearly visible;
  • The subject must be able to withdraw his/her consent at any time and such fact must be explained.

Moreover, where consent is given for processing, it must only be processed for the purposes for which it was given and for no other purpose.  Therefore, it is so important for the consent to be informed prior to be given, as the subject must be able to have knowledge of the following information:

  • The identity of the data processor and/or controller;
  • The purposes of the data processing;
  • The type of data to be processed;
  • The choice of consent withdrawal;
  • Where necessary, it must be stated that the processed data shall be used only for automated-based decision-making, including profiling of the subject;
  • In case of international transfers of data, the possible risks of data transfers to third countries outside the EU must be stated.

Another interesting question is, what happens with data processing related to minors? Who must give the consent in order for it to be valid and lawful? The answer is explicitly stated in article 8 of the Regulation, where the conditions applicable to such consent are thoroughly explained.

In the event that the offer of information is directed to the child, the processing of personal data of the underage subject shall only be considered as lawful if the minor is at least 16 years old. Otherwise, consent must be given or authorized by the holder of parental responsibility of the minor in question. Certain EU Member States may allow by national legislations such direct consent by the minor to be given at a lower age than 16 years old, however it can never be below the age of 13 years old.

Furthermore, the data controller must make reasonable efforts to verify if the consent is indeed given or authorized by the holder of parental responsibility over the minor, with the use of technology.

In conclusion, consent is a very important element not only in data processing, but also in Contract Law and Law in general. Therefore, it is highly recommended to read thoroughly and evaluate legal documents, including consent forms, prior to signing anything or clicking on a digital button, and ask for legal advice, where necessary.

 

The present article is for informational purposes only and does not, under any circumstances, constitute legal advice. For further information on the subject, please contact our law firm and one of our attorneys shall be glad to assist you.

 

Nika Kalifatidou

Advocate – Legal Consultant

Managing Partner

T.K. & Associations Law Firm

 

 

 

 

 

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MiCA: a highly anticipated new era in Crypto-Assets
  • 7 March 2023
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Back in September of 2020, the European Commission had presented a proposal for a Regulation on Markets in Crypto-Assets, otherwise referred to as MiCA, in addition to an amendment to the Directive (EU) 2019/1937. The foundations of such initiative find their source in Article 114 of the Treaty on the Functioning of the European Union (TFEU), according to which the EU is competent in suggesting provisions for the legal approximation of its’ Member States, as well as in Article 26 of the same text, which establishes the functioning of the internal market. While in March of 2019, the EU Commission, in an effort to promote a “more competitive and innovative European financial sector”, suggested the FinTech Action Plan, which would prepare the EU for the new digital era, by supporting innovation and competition in terms of digital finance, while offering investors significant protection from potential risks.

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Post-trade transparency according to the EU legislation
  • 13 February 2023
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The European Markets Infrastructure Regulation (EMIR) (EU) No. 648/2012 on OTC entered in vigor on August 16th of 2012 is an EU Regulation on OTC derivatives, central counterparts and trade repositories which has been adopted for the optimization of transparency in derivative markets. The Regulation was inspired by the G20 commitments as agreed upon in Pittsburgh back in September of 2009.

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Golden Visa Greece: Last call for the 250.000!
  • 22 December 2022
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Golden Visa Greece

Following the amendments suggested by the Hellenic Government earlier in September and approved this week by the Ministry of Development and Investments, the minimum amount of investment has been doubled  in the most popular and expensive areas of the Hellenic Republic.

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The Greek Residency Program: Why invest into the Hellenic Republic
  • 22 September 2022
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Over the past few years Greece has become an attractive pole for investors due to the countrys’ unique location, history, climate and natural resources. Situated at the crossroad of three continents, Greece is a major business center, particularly within the shipping and tourism sectors, while it is considered to be the number 1 holiday destination. Most investors choose the Hellenic Republic for their permanent residency for the entire family, in order to live, travel, study or just have a secondary home in the EU.

(more…)

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