Qualifying film categories within the framework of the Scheme:
It is noted that with respect to the cash rebate or the tax credit, the applicant shall select which incentive they wish to take advantage of. According to the scheme, the cash rebate can apply together with the tax discount for investment in infrastructure and equipment as well as together with the VAT return and the tax credit can apply together with investment in infrastructure and equipment as well as together with the VAT return.
Qualifying film categories within the framework of the Scheme:
- Feature films – Long Films
- Television film
- Television series
- Mini series
- Digital or Analogue Animation
- Creative documentary
- Transmedia and Crossmedia productions
- Reality programs which directly or indirectly promote Cyprus and its culture
The English translation of the Scheme can be found online under: cyprus film industry
The Cyprus Film Commission
The Cyprus film commission is chaired by CIPA, who is the responsible body for examining the applications and the first point of contact for the interested parties. CIPA will also provide support in obtaining permits, importing and exporting equipment and dealing with the relevant local authorities and ministries.
The Cyprus Film Commission is a four-member committee consisting of representatives of Ministries and Organizations which are approved by the Competent Authority. The current members are:
- Ministry of Education and Culture (Senior officer)
- Ministry of Finance (Senior officer)
- Cyprus Investment Promotion Agency (Senior officer)
- Cyprus Tourism Organisation (Senior officer)
European Union: Restarting The Clock: Residency Solutions For Non-Doms
The new rules bring an end to the permanency of non-dom status and will mean that those who have chosen to make the UK their long-term residence will pay tax on the same basis as UK domiciles. The rules do, however, allow for some flexibility to continue to reflect the fact that some non dom rules cyprus are internationally mobile.
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Maximise Time Spent in UK
The proposed rules make provision for individuals who have lived in the UK for 15 consecutive tax years and then leave the UK for 6 or more consecutive tax years, meaning that they could return to UK and claim non-dom status again for another 15 years (assuming they still had a foreign domicile status under general law).
The government has stated that introducing the deeming rule in this way will allow those non-doms who are internationally mobile to continue to benefit from non-dom status in a way that is not appropriate for those who are firmly based in the UK.
In light of these reforms, UK non-dom individuals should reconsider their tax residence position before April 2017. An effective strategy to pursue in order to prevent being negatively affected could be to cease to be UK tax resident for a period of time, and to therefore divert UK deemed-domiciled status.
It is possible for individuals who cease to be UK tax resident for 6 years to lose their UK deemed-domiciled status. Should these individuals then, at a later date, wish to return to being UK tax resident, this strategy will allow them to "reset the clock", as it were, thereby restarting the year count for the deemed-domiciled test.
If you decide to cease being a UK tax resident, you will likely hope to continue to spend time in the UK for personal or business reasons. Gibraltar is an attractive jurisdiction to consider as an alternative residence if you are looking to: avoid language barriers; have access to quality education and health services; ensure an equal or improved lifestyle; remain close to family and friends who are mostly in Europe; have a reasonable corporate and personal tax regime; have access to highly-qualified professionals and recognised institutions within an efficient financial sector.
Gibraltar: The Ideal Jurisdiction
Gibraltar offers a unique set of advantages for individuals seeking to establish residency. Enjoying a Mediterranean climate and located at the southernmost point of the Iberian Peninsula, this self-governing British overseas territory boasts a robust and diversified economy and has emerged as a leading international financial centre. Gibraltar has replaced its former tax exempt regime with an internationally competitive tax model, and is garnering ever-growing favour as a transparent, compliant and internationally-cooperative jurisdiction for businesses and "fiscal nomads" looking for legitimate ways to lower their tax bill in a properly regulated environment.
Qualifying (Category 2) Status - Cat 2
This status for High Net Worth Individuals (HNWIs) was introduced in February 1992 by the Government of Gibraltar through the introduction of new low tax limits for HNWIs in order to encourage these individuals to establish a residence in Gibraltar.
Who Would Benefit?
The benefits of the Category 2 status and residency in Gibraltar are especially attractive for individuals from countries where levels of personal income tax are particularly high, such as Britain.
A Category 2 Individual will have their Gibraltar tax capped to the maximum calculated on the first £80,000 of assessable foreign income, with a minimum tax payable per annum of £22,000. In the first year of assessment the minimum tax payable under the new Rules shall be £1,833.33 (1/12) for each complete or part month for which the certificate is in force in that fiscal year.
What's Required?
In order for an individual to qualify for Cat 2 status they will be required to have available for their exclusive use approved residential accommodation in Gibraltar for the whole of the year of assessment (July to June). In addition, an applicant must submit a Curriculum Vitae detailing their qualifications, source of wealth and income, work experience and 2 references to vouch for their good financial standing and repute. One must be from a Banker confirming that the individual's financial status is in excess of £2,000,000. Each applicant will also have to satisfy the authorities that they hold private medical insurance.
Additional Noteworthy Benefits
Regardless of an individual's tax category, interest arising from a licensed bank or building society or dividends arising from companies quoted on a recognized stock exchange are not taxable in Gibraltar. There is no Wealth Tax, Capital Gains Tax, Gift Tax or Estate Duty in Gibraltar and no tax on the remittance of capital to Gibraltar.
Cyprus: The Cyprus Non-Domicile Regime - An Attractive Tax Regime For Individuals Relocating To Cyprus
Why Cyprus?
Cyprus has become an attractive option for companies and individuals. Advantageous tax incentives exist and Cyprus is popular as both a corporate and residential location, offering a sound infrastructure, and also enviable weather.
Benefits Enjoyed by Tax Residents of Cyprus who are not Domiciled in Cyprus
As a result of pre-existing tax legislation and the exemption from Cyprus’ Special Contribution to Defence Tax (SDC), introduced in 2015 legislation, non-domicilaries benefit from a ZERO rate of tax on the following sources of income:
- Interest
- Dividends
- Rental income
- Capital gains (other than on the sale of immoveable property in Cyprus – subject to a partial exemption on newly acquired property)
- Capital sums received from a pension, provident or insurance fund
These zero tax benefits are enjoyed, even if the income has a Cyprus source and is remitted to Cyprus.
- In addition there are NO wealth or inheritance taxes in Cyprus.
Other Beneficial Features of the Cyprus Tax System for Individuals
- Income Tax Reduction for New Personal Income Tax Payers
Individuals who were not previously resident in Cyprus and take up residency in Cyprus for work purposes are entitled to the following reduction, as long as their annual salary is greater than €100,000:
- 50% of the salary earned in Cyprus is exempt from income tax for a period of ten years.
- Low Tax Rate: Foreign Pensions
Individuals receiving a pension arising from services provided abroad can elect to pay an income tax rate of 5% on pension income in excess of €3,420.
July 2015 Legislation
On 9 July 2015 the Cyprus House of Representatives approved new tax laws which provide significant benefits to high net worth individuals relocating to Cyprus. It is since this time that Cyprus has operated a non-dom regime.
The main benefits of the new legislation were:
- Special Defence Tax (SDC) exemption for Cypriot non-domiciled tax residents
- Extension of the personal income tax reduction on the salaries of new residents
- Capital gains tax exemption: on newly acquired Cyprus immoveable property
- Reduction in land registry fees
- Corporation tax: notional interest reduction
The Definition of Residence and non dom rules cyprus for SDC Purposes
- In July 2017, the Cyprus Government voted for an amendment, establishing a new “60 day rule”. This new rule applies to individuals who, in the relevant tax year:
- reside in Cyprus for at least 60 days.
- operate/run a business in Cyprus or are employed in Cyprus or are directors of companies which are taxed in Cyprus. Individuals must also have a residential property which they own or rent.
- are not tax resident in another country.
- do not reside in any other single country for a period exceeding 183 days in aggregate.
If individuals physically reside in Cyprus for more than 183 days in one calendar year, they are considered Cyprus tax resident. This is known as the “183 day rule”.
If the applicant satisfies either the “183 day rule” or the “60 day rule” and becomes tax resident in Cyprus (but not domiciled there), the tax benefits detailed above can be enjoyed.
Summary
The non-domicile status in Cyprus offers a number of additional benefits to high net worth individuals, who are not domiciled in Cyprus. The regime offers additional financial incentives for individuals to consider Cyprus as an attractive destination for residence.
Cyprus: Cyprus Tax Residency And Non-domicile Concept
Cyprus strategic geographical location, its warm climate and its favourable tax system has made the island the ideal location for business and trade. Cyprus has been an EU state member since 2004 and a member of the Eurozone since 2008.
Cyprus has a very modern, transparent and efficient tax system that is fully aligned with EU and international regulations.
Below is an analysis on the principles of Cyprus tax residency for individuals, a breakdown of the non dom rules cyprus concept and a list of a few advantages for Cyprus tax resident individuals.
Rules on Cyprus Tax Residency and how it is calculated:
Below are two rules that can be used in order to distinguish and understand when an individual qualifies as a Cyprus tax resident for a specific year:
The 183 days rule:
If an individual resides in Cyprus for more than 183 days during a tax year, then this individual will qualify as a Cyprus tax resident for that tax year.
The 60 days rule:
On 01 January 2017 the above rule was amended, in order for individuals who meet the below conditions to also be considered as a Cyprus Tax Resident, under the '60 day rule'. Conditions:
- An individual does not spend more than 183 days, either continuously or in total, of that tax year in another country and is not a tax resident in another country for that year;
- An individual spends at least 60 days in Cyprus during that year;
- The individuals carries out a business and/or is working in Cyprus, and/or holds an office with a Cyprus tax resident company any time during that year;
- The individual either owns or rents a permanent residence in Cyprus.
How to calculate days spent in Cyprus:
- The day of departure is counted as a day outside of Cyprus.
- The day of arrival is counted as a day inside Cyprus.
- Arrival and departure from Cyprus on the same day is counted as a day in Cyprus.
- Departure and arrival in Cyprus on the same day is counted as a day outside of Cyprus
Non-Domicile Rules:
In addition to the tax residency rules, on the 16th of July 2015, the republic of Cyprus introduced the "Domicile" concept, through an amendment that was made to the already establish Special Defence Contribution (SDC) laws.
Definition of domicile:
According to the provisions of the Wills and Succession Law, domicile can be obtained in two different ways:
- Domicile by Origin – domicile has been given at birth, normally on the father's side.
- Domicile by Choice –an individual has acquired domicile by forming a permanent residence and has the intention to reside in Cyprus permanently.
Prior to the amendment and according to the already established SDC law, all Cyprus tax resident individuals were subject to SDC on the following income:
- 17% on dividends received in Cyprus or from abroad;
- 30% on passive interest received in Cyprus or from abroad;
- 3% on 75% of gross rental income
The amendment has made a distinction between domiciled tax resident individuals and non-domiciled tax resident individuals.
Domiciled tax resident individuals will continue to be taxed the normal SDC tax rates as stated above on dividend, interest and rental income. Non-domiciled tax resident individuals will be fully exempt from SDC.
In accordance with the SDC law, a Cyprus Domicile individual who has received its status by origin/birth, is considered as a non-domiciled if any of the below are conditions are met:
- Individual has retained a domicile of choice outside of Cyprus, provided that they were not tax residents in Cyprus for any period of at least 20 continuous years prior to the tax year in assessment.
- An individual has not been a Cyprus Tax Resident for at least 20 continuous years prior to the release of the amended SDC law.
It must be noted that when assessing whether an individual is a domicile Cyprus tax resident or not for a specific year, we need to consider the number of years this individual has been a Cyprus tax resident. If an individual has been a Cyprus tax resident for at least 17 out of the last 20 years prior to the tax year under review, then irrespectively from the individual's origin, this individual will be taxed as a Cyprus domiciled individual for SDC purposes. SDC will be payable from the 18th year of individuals reside in Cyprus.
A few other advantages of a Non-Domiciled Cyprus Tax Individual:
- As stated above, a non-domiciled Cyprus tax resident is exempt from any SDC on dividend and interest income. According to Income Tax Law, dividend and interest income is exempt unconditionally. Therefore for any dividend and interest income the individual will have, no tax will be paid in Cyprus.
- Deemed distribution rules on Cyprus tax resident companies do not apply on Non-domiciled individuals.
- If an individual commences employment in Cyprus and was not a Cyprus tax resident during the year before the start of employment, then this individual may be entitled to one of the below exemptions:
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- The 50% exemption rule: Any individual commencing work in Cyprus and earning more than €100,000 annually will be exempt from 50% of their taxable income for a period of 10 years. The calculation of the period of 10 years commences from the first year of employment. This exemption will not apply to any individual that was a Cyprus tax resident 3 out of 5 years preceding the year of commencement of employment.
- The 20% exemption rule: Any individual commencing employment in Cyprus is eligible for an exemption of 20% of their taxable income or €8,550 (whichever is lower). Exemption under this rule is for a period of 5 years. Starting period date is the 1st of January following the year of commencement of employment and can be applied up to/including 2020. Following 2020 this exemption will expire.
- There is the option for overseas pension to not be taxed normally in Cyprus but be taxed under a special mode of taxation in which pensions are exempt from tax up to €3,420 and any amount above that is taxed at a flat rate of 5%.
