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LEGAL UPDATES
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New legislation approved on 12 December 2012
14.12.2012
Area(s) of Practice: Banking and Secured Financing, Corporate and Commercial Law, Taxation Law

The Company (Amendment)(No3) Law of 2012

According to the new amendment of Section 391 of Cyprus Company Law, Cap. 113, the additional corporate tax of €350 per year that had been imposed on companies under Law 117(I)/2011 shall apply to all companies registered in Cyprus without any exceptions from now on. It is reminded that this amount is payable at the latest on the 30th June of each year.

The Imposition of Special Tax on Credit Institutions (Amendment) Law of 2012

Law 84(I)/2011 [as amended by 199(I)/2011] is now further amended in order to:
• extend the validity of its provisions beyond 2012;
• delete those of the provisions of Section 4 stating that the special tax for the years 2011 and 2012 shall not exceed the 20% of the taxable income of a credit institution. As a result of this amendment, Section 6 providing for the refund of any excess has also been deleted;
• increase the special tax on deposits from 0,095% to 0,11%.

The Income Tax (Amendment) (No4) Law of 2012

New amendment to Section 13(1) of the Income Tax Law, 118(I)/2002, provides that, notwithstanding any other provision of the law, loss occurred during any year of assessment shall not be carried forward and shall not be set off against the income of any year of assessment, after the lapse of five years from the end of the year of assessment in which the said loss occurred. The new provisions shall apply to any person that must keep books of account and submit accounts which are to be audited by an independent auditor under the provisions of the Assessment and Collection of Taxes Law.

The Excise Duties (Amendment) (No5) Law of 2012

Excise Duties Law, 91(I)/2004 (First Schedule), has also been amended in order to increase rates on petrol and diesel used as motor fuel. In particular, the rate on petrol and diesel used as motor fuel shall be increased by €70 per 1000 litres (€0.07 per litre) with effect from 1 January 2013 and additionally by €50 per 1000 litres (€0.05 per litre) with effect from 1 January 2014.
As a result of the amendment, on 1 January 2013 the excise duty rate on petrol shall be increased from €359 to €429 per 1000 litres and the rate on diesel used as motor fuel shall be increased from €330 to €400 per 1000 litres. On 1 January 2014, the rate on each product shall be €479 and €450 respectively.
 Furthermore, the Minister of Finance, taking into consideration the Index of Consumer Prices, is granted the authority to readjust the excise duty rates by issuing a Decree published in the Official Gazette of the Republic.

The Assessment and Collection of Taxes (Amendment) (Νο2) Law of 2012

Following the new amendment to Section 51A (1) (ii) of the above law, an intentional failure of a natural person to pay any tax due under the Law or a late payment, is now regarded as a predicate offence carrying a sentence of imprisonment of at least one year, instead of six months at maximum provided prior to the amendment. Also, the amendment aims at increasing administrative co-operation and information exchange between Cyprus competent authorities and foreign tax administrations, in accordance with the recommendations of the Organisation for Economic Co-operation and Development (OECD).

The Prevention and Suppression of Money Laundering Activities (Amendment) (No2) Law of 2012

The new amendment of the Law 188(I)/2007 [as amended by 58(I)/2010 and 80(I)/2012] provides that the powers of the Supervisory Authorities monitoring the activities of auditors and independent legal professionals shall also include trustee and company services provided by these professionals to third parties [amendment to Section 59(2)]. In addition, it is now provided that the Unit for Combating Money Laundering may apply for a Court Order of disclosure (Sections 45 and 46) also in cases there is a reasonable ground that a person involved in a financial transaction may have committed a laundering offence or a financing terrorism offence. The Law aims to clarify and enhance the powers of the Unit regarding the investigation of financial transactions and to further strengthen its co-operation with foreign competent Units.

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