We communicate with you to inform you about the latest developments of the ECB/EU/IMF troika financial assistance to Cyprus. Last Saturday the Eurogroup decided in favour of a financial assistance to be provided to Cyprus with a package of measures which include:
• an one off solidarity levy on bank deposits and credit balances of 6,75% for amounts of up to €100.000 and of 9,99% for amounts exceeding €100.000. This levy will apply to all bank accounts (current, deposit, notice etc.) with banks operating in Cyprus (local and international) and bank branches. Depositors will be compensated with the equivalent amount in shares in Cyprus banks, and a plan is being contemplated for those who will keep their deposits in Cypriot banks for the next two years to be given bonds linked to revenues from natural gas; and
• an increase of corporate tax rate from 10% to 12,5%.
The upside of Saturday’s Eurogroup decision is that the uncertainty over the Cyprus economy and the future of its major banks will disappear with the financial assistance agreement. The EU and the IMF have also confirmed that these measures will ensure that the Cyprus economy will be sustainable without any further support or measures.
As a firm, we believe that:
• the increase of the corporate tax rate by 2,5% will not negatively affect international business in any significant way as corporation tax affects mainly trading income. Most international companies in Cyprus are set up as investment holding companies or group financing companies. Cyprus companies will still benefit from full participation exemption on capital gains, full participation exemption on dividend income, no Cypriot withholding tax on dividends, interest and royalties, no thin cap rules, no CFC rules, no exit charges, effective tax on royalty income of 2,5% (from 2%), interest income being taxed on thin margin only and all the other current positives of the Cyprus tax regime. In addition, even with this corporation tax increase, Cyprus remains one of the lowest corporation tax jurisdictions in the EU.
• the imposition of the one off solidarity levy on bank deposits and credit balances in the Cypriot banking system is unacceptable as such a measure is unprecedented and undermines the European banking system. Shares in banks on major international stock exchanges took a pummelling on Monday (yesterday) as a result of the dangerous precedent that has been set.
The Eurogroup decision needs to be ratified by the Cyprus House of Representatives to be effective. The decision with respect to the levy on deposits has sparked huge public anger in Cyprus and beyond and it is currently questionable if the House of Parliament will ratify it – the Parliament is expected to hold a special session for this today at 6pm Cyprus time.
We shall keep you informed of developments on this important issue. Please feel free to contact us for further information, assistance or clarifications.
- Cyprus Wins Exemption for Small Savers from Bank Levy (marketcurator.com)
- Bailout terms ‘death knell’ for Cypriot finance sector (ekathimerini.com)
- A look at Cyprus’ move to seize bank deposits (seattlepi.com)
- Eurogroup agrees to allow Cyprus to tweak deposit tax as long as agreed target is met (ekathimerini.com)
- Cyprus depositors face up to 10% haircut as part of bailout deal agreed at Eurogroup (ekathimerini.com)
- Cyprus seeks to alleviate pain from deposit raid (cbc.ca)
- Complete Eurogroup Statement On Cyprus (zerohedge.com)
We are very pleased to announce that Baker Tilly Klitou (auditors, accountants, tax and management consultants) have been awarded the Cyprus Special Exports Award for services for the year 2011. This is a great honour for our firm. This award is a recognition towards the quality of our services and the dynamism and persistence of our people, in achieving great results in our efforts to promote our services and our country as a business and financial centre. The annual Cyprus Services Exports Award falls under the auspices of the Ministry of Commerce, Industry and Tourism and the Cyprus Chamber of Commerce and Industry. This annual award constitutes an outstanding support towards the Cypriot economy but especially to the businesses in the service industry, which are the backbone of the economic activities of our country, accounting to more than 70 per cent of our GDP. The 2011 Cyprus Special Exports Award for Services opens new horizons for us and demands the setting of higher goals for the future. And we can only achieve this by working closely as one team – one cohesive force with our people and our clients. Committed in providing quality business solutions. Contributing towards the advancement of our country’s economy in these challenging times.
We at Quoracy.com would like to congratulate Marios and his firm on this prestigious award.
“Cyprus: a vehicle for international transactions and investments”
Intercontinental Hotel, Emilii Platter 49, Warsaw
16 June 2011, 8.00am – 11.00am
This event is aimed at introducing Cyprus companies as vehicles for international transactions and investments covering the key requirements applied by the authorities and the banking system in Cyprus and Poland.
Experienced professionals and speakers of Baker Tilly Poland and Baker Tilly Klitou of Cyprus will be presenting a range of topics, suggesting practical solutions and sharing their experience. A Q&A session before the close of the event will give participants the opportunity to talk directly with our speakers in order to raise their queries or obtain additional information.
8.00 – 8.35 am - Business breakfast
8.35 – 8.40 am - Welcome address
David James, International Liaison Partner, Baker Tilly Poland
8.40 – 8.55 am - “Cyprus transactions: Polish taxation”
Steven Foster, Baker Tilly Poland
8.55 – 9.10 am - “Cyprus: an attractive investment and business destination”
Marios Klitou, CEO of Baker Tilly Klitou
9.10 – 9.25 am - “IFRS Regulations in Cyprus”
Christodoulos Loulloupis, Director, Audit Services, Baker Tilly Klitou
9.25 – 9.40 am - “Tax in Cyprus and structuring ideas”
Therapon Mafkas, Director, Tax Services, Baker Tilly Klitou
9.40 – 9.55 am - “Collective Investment Schemes”
Chris Koutouroushis, General Manager, Bizserve Consultants Ltd
9.55 – 10.10 am - Presentation from a Cyprus bank on “International Banking in Cyprus”
10.10 – 10.25 am - “Polish-Cypriot success stories – Enhancing investment opportunities”
David James, International Liaison Partner, Baker Tilly Poland
10.25 – 10.55 am - Questions & Answers
11.00 am - Close of Conference
In order to obtain your free registration, please contact firstname.lastname@example.org by Wednesday, 8th June 2011. If demand exceeds space available, registration will be first come, first served.
We look forward to seeing you at the Conference!
- Why Buy A Property In Cyprus Is A Good Idea For You? (propertiesincyprus.wordpress.com)
- How To Get A Property In Cyprus To Live? (propertiesincyprus.wordpress.com)
- What a beautiful country – Cyprus, Cyprus (travelpod.com)
- Sunday after Easter flying to Cyprus again. – Larnaca, Cyprus (travelpod.com)
- Bank of Cyprus: Disagrees With Fitch Downgrade Of Cyprus Debt (forexlive.com)