The long anticipated changes clearly aim for Cyprus becoming even more attractive for foreign investors and mutual funds as well as clarifying some important issues that were grey in the previous legislation. In summary the changes are:

Income tax law
Interest received by mutual funds/collective investment schemes is considered as earned from ordinary activities and therefore not subject to SDC.

No income tax on interest (not from ordinary activities) received by companies. So only Special Defence Contribution at 10%. 50% exemption abolished.

Profit from sale of units in mutual funds/collective schemes in exempt. They are included in the term titles.

Special Defense Contribution law

Reduction of the SDC on deemed dividend distribution for mutual funds and ICIS from 15% to 3%. Same at dissolution.

Please email us for more detail explanation on the changes.