Pekris Theodorou LLC

Litigation Update: Cyprus Limitation of Actions Law – Further extension of Law

Admin — Sat, 10 Dec 2011 10:02:08 +0000

The Cyprus Limitation of Actions Law, Cap 15, sets out the time limits within which claims must be brought before a court.

The Law was suspended following inter-communal disturbances in 1964 and has remained suspended ever since. Law 159(I)/2011, which was enacted on the 09.12.2011, now provides that the suspension of limitation will cease on the 30.06.2012.

Law 110(I)/2002 was passed, which provided that the Limitations Law would re-enter into force with effect from 1 June 2005. However, Law 110(I) itself was suspended, initially until 31 March 2010, later until 30 November 2010 and then until the 31 March 2011. Subsequently Law 41(I)/2011, further extended period until the 31 December 2011.

Limitation Law, Cap 15 as amended by Law 108(I)/2002, Law 60(I)/2007, Law 28(I)/2008, Law 34(I)/2008, Law 16(I)/2009, Law 20(I)/2010, Law 111(I)/2010, Law 41(I)/2011 and Law 159(I)/2011.

Pekris & Theodorou LLC is a Cyprus law firm with Cyprus lawyers and other legal experts on legal matters involving Cyprus law, EU law and international law. The above should be used as a source of general information only. It is not intended to give a definitive statement of the law and is subject to the disclaimer.

Tax Law Update: Cyprus Tax amnesty law passed

Admin — Fri, 25 Nov 2011 07:41:42 +0000

Cyprus Parliament has enacted legislation providing for the partial write-off of interest and penalties on overdue tax, provided that the balance is settled by the 31 March 2012.

The newly enacted legislation applies to individuals and companies alike and affords a waiver of interest and penalties in excess of 5% of the principal amount owed. The law applies to income tax, SDC tax, immovable property tax, stamp duty and capital gains tax for periods up to 31 December 2008.

The law was enacted despite warnings from the office of the Attorney General`s office that it is unconstitutional. In a letter to the House Finance Committee, the Attorney General warned that the legislation contravenes articles 24 and 28 of the Cyprus Constitution, which provide that all persons are equal before the law and that every person is bound to contribute according to their means towards public burdens.

The Attorney General warned that the legislation would have the same effect as a similar law passed in December 2007, which was ruled as being discriminatory by the Supreme Court. In its May 2008 decision, the Supreme Court held that the 2007 law was unconstitutional since it discriminated against taxpayers who comply with their obligations in favour of those who refuse to assume and fulfil the same obligations.

Further Tax Law related information is available here.

Cyprus Property Law Update: Temporary Suspension of Property Transfer Fees

Admin — Fri, 04 Nov 2011 10:39:52 +0000

The Cyprus Parliament unanimously passed a bill on the 3.11.2011 suspending the payment of property transfer fees on properties subject to VAT for a period of 6 months. The bill also provided that the property transfer fee for purchases not subject to VAT will be reduced by 50% of the current level for the same time period.

The law also provided that purchasers who submit applications under the provisions of the Town Planning Amnesty will enjoy the same benefit.

Following the expiration of the 6 months it is expected that new legislation reforming the taxation of real estate in Cyprus will apply.

Further Property Law related information is available here.

Tax Law Update: New top rate for Cyprus personal income tax

Admin — Thu, 01 Sep 2011 12:29:36 +0000

A 35% income tax rate has been introduced for taxable income in excess of €60,000.

The tax bands and rates are therefore now as follows:

Chargeable Income EUR €	Tax Rates %	Tax Amount EUR €	Cumulative Tax EUR €
0-19.500	0	_	_
19.501-28.000	20	1.700	1.700
28.001-36.300	25	2.075	3.775
36.301 – €60,000	30	7.110	10.885
over €60,001	35

Further Tax Law related information is available here.

Cyprus Property Law Update: VAT reduced for the purchase or construction of first residence

Admin — Wed, 31 Aug 2011 10:14:36 +0000

On the 26 August 2011 the House of Representatives approved legislation aimed at stimulating the local property market.

The legislation passed provides that eligible persons will be subject to a lower VAT rate of 5% on the purchase or construction of a first residence. The rate will apply for the first 200 square meters of residences of total covered area of up to 300 square meters and takes force as of 1 November 2011.

Under the legislation an “eligible person” is defined as any individual who fulfills the following conditions:

(i) has completed 18 years of age at the time of submission of his application,

(ii) is a citizen of the Republic of Cyprus or any other Member State of the EU, and

(iii) does not own any other place of residence in Cyprus.

It should be noted that the reduced rate applies only for properties which are used as the primary and permanent place of residence.

The current VAT refund scheme will cease to apply once all pending applications are examined. Applications for VAT refund can be submitted up until the 1 November 2011.

Further Property Law related information is available here.

Update: Legislation rejected by President and not enacted. Amending Law 129(I)/2011 enacted, which can be can be viewed (Greek language) here.

Litigation Update: Are arbitrators employees or independent providers of services?

Admin — Wed, 27 Jul 2011 14:39:28 +0000

In the case of Jivraj v Hashwani [1], the U.K. Court of Appeal held that an arbitration agreement which provided that only persons of a certain religious belief could act as arbitrator was void because arbitrators fall within the scope of English anti-discrimination employment legislation in relation to religion and belief (the Employment Equality (Religion or Belief) Regulations 2003).

The Court of Appeal’s finding that arbitrators were employees had raised a number of questions; not least as such characterisation is inconsistent with many of the functions and duties of arbitrators under the U.K. Arbitration Act 1996.

Both parties appealed the Court of Appeal`s decision to the Supreme Court. The broader potential implications of the case have generated considerable discussion within the international legal community. One of the key issues for consideration by the U.K. Supreme was whether the nature of the agreement between the parties and arbitrators, was such, that arbitrators may be considered ‘employees’ of the parties, (and thereby subject to the law prohibiting discrimination by employers).

In today’s decision [2] (27 July 2011), the Supreme Court confirmed that arbitrators are not employees within the meaning of domestic anti-discrimination legislation.

The Supreme Court after considering both European and English case law identified a clear distinction between those who are in substance employed, and those who are “independent providers of services who are not in a relationship of subordination with the person who receives the services”. The court held that an arbitrator is in the category of an independent provider of services who is not in a relationship of subordination with the parties who receive his services.

[1] [2010] 2 Lloyd’s Rep 534, [2010] IRLR 797, [2010] EWCA Civ 712

[2] [2011] UKSC 40

Pekris & Theodorou LLC is a Cyprus law firm with Cyprus lawyers and other legal experts on legal matters involving Cyprus law, EU law and international law.The above should be used as a source of general information only. It is not intended to give a definitive statement of the law and is subject to the disclaimer..

Tax Law Update: Cyprus – Luxembourg talks on DTA

Admin — Wed, 20 Jul 2011 18:22:20 +0000

On the 19th July 2011, Luxembourg’s Finance Minister Luc Frieden conducted an official visit to Cyprus.

According to the Luxembourg government Mr Frieden exchanged views with his Cypriot counterpart Charilaos Stavrakis, on recent developments in their respective financial sectors and on European and national legislation in this area. Within this context, Cyprus and Luxembourg agreed to initiate negotiations seeking to conclude a bilateral double taxation agreement (DTA) between the two countries, in a bid to strengthen cooperation between the two financial centres.

Mr Frieden also met the governor of the central Bank of Cyprus, Athanasios Orphanides, as well as the president of the Cyprus Securities and Exchanges Commission, Mr Georgios Charalambous.

Pekris & Theodorou LLC is a Cyprus law firm with Cyprus lawyers and other legal experts on legal matters involving Cyprus law, EU law and international law.The above should be used as a source of general information only. It is not intended to give a definitive statement of the law and is subject to the disclaimer.

Banking Law Update: Memorandum of Understanding between the China Banking Regulatory Commission and the Central Bank of Cyprus

Admin — Sat, 16 Jul 2011 18:30:59 +0000

The China Banking Regulatory Commission (CBRC) and the Central Bank of Cyprus, expressing their mutual interest and willingness in promoting further the bilateral ties in the domain of supervision of credit institutions, concluded on 15 July 2011 a Memorandum of Understanding (MoU).

The MoU has been signed on behalf of the CBRC by its Chairman Mr LIU Mingkang, who visited Cyprus for this purpose and, on behalf of the Central Bank of Cyprus, by its Governor, Mr Athanasios Orphanides.

The MoU follows the basic principles of cooperation between supervisory authorities, as formulated by the Basel Committee on Banking Supervision. The MoU outlines the general framework of mutual cooperation and exchange of information between the two supervisory authorities, for the purpose of facilitating the performance of their supervisory function as well as for the effective supervision and regulation of credit institutions with a cross border presence, in accordance with the respective national laws and regulations.

News: Memorandum of Understanding signed by the Qatar Exchange and the Cyprus Stock Exchange

Admin — Wed, 08 Jun 2011 12:18:36 +0000

The Qatar Exchange and the Cyprus Stock Exchange signed a Memorandum of Understanding on the 6th of June 2011 . The purpose of the Memorandum of Understanding was to formalize cooperation between the two markets.

The Memorandum of Understanding was signed by Mr. Andre Went, CEO of Qatar Exchange and by Mr Epaminondas Metaxas, CEO of the Cyprus Stock Exchange.

In the signing ceremony, Mr. Went stated that “I am delighted to see this Memorandum of Understanding signed between the two exchanges, hoping that it will help enhance the economic cooperation between the two countries.

The Memorandum of Understanding clearly fits in a range of agreements that have been signed between the State of Qatar and the republic of Cyprus and it signals the willingness of the two countries to cooperate and develop this relation further. The signing ceremony today is just a beginning of further cooperation between the two exchanges. We will soon start the work that has to be done in order to implement the scopes of cooperation included in the Memorandum of Understanding. I look forward to a long and mutually beneficial relationship between Qatar Exchange and the Cyprus Stock Exchange.”.

On his part Mr Metaxas, Director General CEO of the Cyprus Stock Exchange, thanked the Qatar Exchange and said he was confident that the Memorandum of Understanding will prove to be a useful instrument not only to further strengthen the level of cooperation between the two exchanges, but also to open new areas of business opportunities for the market participants both in Qatar and in Cyprus.

The purpose of this Memorandum of Understanding is to establish and implement a procedure of mutual co-operation and agreement between the two Exchanges, primarily for the purpose of facilitating the execution of functions assigned to them, the exchange of information, the proper dissemination of information and the promotion of the integrity of the markets. This Memorandum of Understanding provides a framework of co-operation, which includes the existence of a channel of communication between the two Exchanges, the increasing mutual recognition and the exchange of information of legal and technical content.

The ceremony was attended by Mr Panicos Kyriakou, ambassador of the Republic of Cyprus to the State of Qatar and Mr Rashid Al-Mansoori, Deputy CEO of Qatar Exchange.

Full press release here

Pekris & Theodorou LLC is a Cyprus law firm with Cyprus lawyers and other legal experts on legal matters involving Cyprus law, EU law and international law.The above should be used as a source of general information only. It is not intended to give a definitive statement of the law and is subject to the disclaimer.

Tax Update: EU Commission requests Cyprus to modify excise duty rules for imported second-hand motorcycles

Admin — Mon, 02 May 2011 11:58:36 +0000

The European Commission has formally requested Cyprus to amend its legislation on depreciation scales for the calculation of excise duties on second-hand motorcycles because the current rules discriminate against imported motorcycles.

Under current Cypriot legislation, owners of second-hand motorcycles have to pay an excise duty depending on the depreciation of these vehicles, i.e. their loss in value over a certain period of time. However, the Cypriot legislation only takes into account the criterion of age when calculating the duties and limits it to 10 years. In practice, a motorcycle that is two or three years old would depreciate at almost the same pace as a motorcycle aged four or five years old and depreciation for vehicles aged fifteen or twenty years would remain the same as for vehicles ten years old.

Such a system could result in higher taxation for second-hand motorcycles imported to Cyprus than for those already registered in the country and is therefore in breach of EU rules on tax discrimination against products imported from other Member States (Article 110 of the Treaty on the Functioning of the European Union). The Gomes Valente case (C-393/98 of 22 February 2011) is authority that such discriminatory tax treatment is in breach of EU rules.

The European Commission considers that the current legislation is in breach of EU rules on tax discrimination against products imported from other Member States. The request takes the form of a ‘reasoned opinion’ (second step of the infringement procedure provided for in article 258 of the Treaty on the Functioning of the EU). In the absence of a satisfactory response within two months, the Commission may decide to refer Cyprus to the EU’s Court of Justice.

Further infomation: http://europa.eu/rapid/pressReleasesAction.do?reference=IP/11/426&format=HTML&aged=0&language=en&guiLanguage=en