Reduction and simplification of the taxation of interest income and income from dividends pursuant to the income tax act treatment of interest income of tax resident companies in Cyprus are interest income from funds after deduction of the expenses and costs now only with the normal corporate income tax i.H.v tax 10%. (So far interest income with the half tax rate (5%) and 10% were taxed so Verteidigungssonderabgabe, with a total of 15%.) Interest income of natural and legal persons arising in connection with the business activities, taxed 10% according to the income tax act after deduction of the expenses and costs only with the normal corporate income tax i.H.v. (So far: same as above) Interest income of natural and legal persons that do not meet the conditions in the preceding paragraph, taxed Verteidigungssonderabgabe without deduction of expenses and costs, with only 10%. (So far: same as above) Treatment of income from Foreign dividends of tax-resident companies in Cyprus that stands adopted amendment of the income tax act the condition of 1% participation of Cypriot society in the foreign company to the tax exemption for income from dividends on. The tax exemption of income of Cypriot companies from dividends from foreign companies has been subject to the condition that the Cypriot company holds at least 1% of the shares of the foreign company. This condition is now repealed.
This makes it easier for portfolio investors to benefit from the tax exemption on income from dividends. Under the new regulations, income from dividends are only then not exempt from tax, if a) more than 50% of the income from business activity of the dividends paid, foreign company directly or indirectly investment income consists of, and b) if the taxation of the profits of the dividends paid, foreign company is significantly lower than the corresponding taxation in Cyprus (therefore less than 5%). Tax treatment of the Fund units held by fund companies fondant rush of open and closed funds are treated as a title. Income of natural and legal persons arising from appreciation or the purchase and sale of securities, are exempt from corporation tax as well as from the Verteidigungssonderabgabe. Fund companies the following provisions apply only to tax-resident holders of securities: a) the rate of the Verteidigungssonderabgabe title paid dividends was reduced from 15% to 3%. (b) the rate of Verteidigungssonderabgabe on dividends from liquidations was reduced from 15% to 3%. Proceeds from return of titles or other receipts, proportion of open and closed funds is not the Verteidigungssonderabgabe. An information service of Shanda consult Ltd.