- Tax scales for motor/sailing yachts;
- Amortized repayment of VAT for Yachts;
- No red tape in VAT & Customs Clearance;
- The services that LLPO Law Firm can offer.
LLPO Law Firm, a Cyprus law firm with offices in Nicosia, London, Athens and Bucharest is excited to announce the launch of their new microsite about Cyprus Yacht registration and Customs / VAT Clearance. Cyprus besides maintaining the lowest Company Tax Rates of all EU members, it is also the most attractive destination in the EU for the registration of Private Yachts. Cyprus maintains the lowest Private Yacht VAT regime, since the effective rate of VAT varies between 3,4% to 10,2%, depending on the size of the Yacht. The website includes information about:
Royalties are the payments of license fees by one individual or entity to another for the use of intellectual property (IP). Intellectual property can take several forms as follow:
In May 2012, the House of Representatives voted new amendments to the Income Tax Law, aiming to establish Cyprus as the ultimate royalty and holding structure jurisdiction.
These changes are particularly important for companies owning any kind of intellectual property rights, patents and trademarks (collectively referred to as IP Rights). Prior to the amendment, all profits from IP Rights were taxed under the normal corporate tax rate of 10% on any resulting net profits.
In light of the new amendment, 80% of profits generated as royalties from such I.P. Rights will be exempt from corporation tax. The remaining 20% will be subject to the normal corporation tax rate of 10%.In conclusion, the effective tax rate applicable on the Cyprus Royalty Company will not be higher than a maximum of 2% on its Royalty Profits.
To calculate the profit generated from royalties, we deduct from the total of the income derived from I.P. Rights, all expenses incurred wholly and exclusively for the production of the I.P. Rights income.
Additionally, acquisition of IP rights can be amortized – in equal installments – over a period of 5 years (20% for 5 years).
All amendments have retrospective effect as from the 1st January 2012.
The amendment reaffirms Cyprus’ position as top holding jurisdiction for intellectual property. Where else can you find such a highly respected nation that effectively taxes IP rights at 2%, has a vast tax treaty network and can access the entire European Union on the basis of the EU royalty and interest directive?
The Russian government has published an Order in the nation’s Official Gazette to provide for the removal of Cyprus from the nation’s ‘blacklist’ of non-cooperative ‘tax havens’ from January 1, 2013, when a Protocol to the nations’ double tax agreement becomes effective.
The ‘blacklist’ was part of an amendment to the Russian tax code which introduced a tax exemption on the repatriation of dividends from foreign subsidiaries of Russian companies, but specifically excluded Russian subsidiaries based in territories and countries on the blacklist.
The Protocol will enter into force upon signing of the ratifying law by President Dmitry Medvedev and after due procedural publication and notification to the Government of Cyprus, which already ratified the Protocol in September 2011.
The new article concerning taxation of sale of shares in companies deriving their value primarily from the real estate will apply as from January 1, 2017, after a 4-year grace period.This will improve the position of Cyprus and will allow Russian companies to structure their investments in foreign ventures through Cyprus, since dividends coming to a Russian parent company from a Cypriot subsidiary will be exempt from taxation. Currently they are subjected to 9% taxation.