Cyprus: Proposed Law Could Replace CSE Transaction Tax With Capital Gains Tax
The Cyprus Financial
Mirror has reported that Kisos MP Doros Theodorou
is due to table a draft bill before the House of Representatives
which will secure the abolition of transaction tax
on stock exchange trades but replace it with the introduction
of taxation on capital gains. Taxes will not be levied
on profits gained from the stock market up to CY£6,000.
For profits of between CY£6,000 and CY£20,000,
the bill proposes a tax of 10 per cent and for profits
over CY£20,000 the rate could be as much as
20 per cent. According to the Financial
Mirror many investors have requested the backdating
of the taxation charge to cover the excessive gains
made by many during 1999 even though most of them
have been lost back this year. Currently, in respect
of property, capital gains tax is levied at 20 per
cent on gains from the sale of immoveable property
(real estate and shares of private companies owning
it). There is a one-time only exemption of CY£10,000
for an individual, or CY£50,000 in respect of
a residence if it has been lived in for 5 years by
the owner before disposal. The tax is payable within
one month after disposal; late payments are charged
at 9 per cent interest. Capital gains tax does not
apply to profits from the sale of overseas real estate
by non-residents, by offshore entities, or by residents
who were not resident when they purchased the asset.
According to the Financial
Mirror's reliable sources, most of the Deputies are
likely to adopt the bill, there are rumours that the
Finance Minister is also in favour of the bill. The draft bill aims to
include gains and losses made by investors over the
last three years. .
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