NEWS

• Posted May 28, 2016

Notional Interest Deduction - Tax year 2016

In accordance with a circular issued by the Tax Department, the interest reference rate of the 10 year government bond as at 31 December 2015, for the purposes of the calculation of the notional interest deduction for the tax year 2016, is as follows:

By way of background, the notional interest deduction rate is the yield on 10 year government bonds (as at 31 December of the prior tax year) of the country where the funds are invested by the company, plus a 3% premium. This is subject to a minimum rate which is the yield of the 10 year Cyprus government bond (as at the same date) plus a 3% premium. Therefore the interest rate for the calculation of the notional interest deduction are as follows:

For more information about the notional interest deduction provision you may refer to our publication.

Should you need any clarifications for the above, feel free to contact us at [email protected]