ΠΕΡΙΓΡΑΦΗ

This advanced-level course provides a structured and practical overview of the taxation of interest income and payments involving Cyprus companies. Covering both inbound and outbound interest flows, it explains how interest income is taxed domestically, the conditions for exemption or inclusion in taxable income, and how the Cyprus Income Tax and Special Defence Contribution (SDC) laws interact.

The course also explores the treatment of intercompany interest under transfer pricing and the OECD Guidelines, Cyprus’s implementation of the EU Interest and Royalties Directive, and the anti-abuse measures that affect cross-border interest payments. Participants will gain a clear understanding of the 30% EBITDA interest limitation rule under ATAD, the impact of hybrid mismatch provisions, and the documentation obligations under the Cyprus TP framework.

Through a practical, example-driven format, professionals will learn how to structure financing flows, navigate treaty provisions, and mitigate compliance risks within group treasury structures involving Cyprus.

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Why Sign Up for This Course?

Interest flows are at the core of many group financing and treasury structures  and Cyprus is frequently used as a hub. But with increasing scrutiny from tax authorities, evolving EU law, and tightened anti-abuse frameworks, the risks of getting it wrong are growing.

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ΣΚΟΠΟΣ ΣΕΜΙΝΑΡΙΟΥ

• Understand when interest income is exempt, taxed, or subject to SDC.
• Navigate the 30% EBITDA interest limitation rule, hybrid mismatch rules, and transfer pricing obligations.
• Confidently apply Article 11 of Cyprus’s tax treaties, assess beneficial ownership, and use the EU Interest and Royalties Directive correctly.
• Avoid pitfalls in intercompany loans and group treasury setups by mastering documentation and compliance requirements.

Whether you are advising clients or managing group finance internally, this course gives you the clarity and tools to operate within the rules while maximising tax efficiency.

ΣΕ ΠΟΙΟΥΣ ΑΠΕΥΘΥΝΕΤΑΙ

• Tax lawyers and advisors
• Corporate accountants and tax managers
• CFOs and finance teams of multinational groups
• Compliance officers and legal counsel
• Corporate service providers and administrators involved in group structuring or intercompany financing

ΠΕΡΙΣΣΟΤΕΡΕΣ ΠΛΗΡΟΦΟΡΙΕΣ

Course content

Module 1: Taxation of Interest – Part A

1.1. Domestic taxation of interest income:

• Distinction between active and passive interest under Cyprus tax law.
• Income Tax Law vs. Special Defence Contribution (SDC) Law.

‍1.2. Deductibility of interest expenses:

• Rules under Cyprus corporate income tax law.
• Arm’s length requirement and impact of ATAD implementation.

‍1.3. Withholding tax on outbound interest payments:

• General rule of no WHT under Cyprus law.
• Exceptions introduced in 2022 for blacklisted jurisdictions.

‍1.4. Transfer pricing rules and intercompany interest rates:

• OECD-aligned requirements under Cyprus TP legislation.
• Determining appropriate rates in group financing.

‍1.5. Characterisation and timing of interest income and expenses:

• Accrual basis, capitalised interest, and related-party issues.

‍1.6. EU Interest and Royalties Directive:

• Scope of exemption, qualifying entities, and anti-abuse measures.

Module 2: Taxation of Interest – Part B

2.1. Taxation of inbound interest income:

• Treatment by Cyprus companies depending on the nature of the activity (active vs passive).
• Income tax inclusion or SDC application.

2.2. Treaty relief for interest income:

• Application of Article 11 OECD MTC in Cyprus treaties.
• WHT rates and beneficial ownership tests.

2.3. Substance and beneficial ownership requirements:

• Practical implications of OECD commentary and ECJ case law.

2.4. Hybrid mismatches and interest limitation rules:

• Implementation of ATAD 30% EBITDA rule.
• Scenarios involving hybrid instruments and double deductions.

2.5. Group treasury and financing structures:

• Use of Cyprus entities in multinational finance flows.
• Tax planning, treaty access, and compliance risks.

2.6. Documentation and compliance:

• Transfer pricing Local File and Master File requirements.
• Practical expectations for documenting intercompany loans.