Supervisory Body

CYPRUS SECURITIES AND EXCHANGE COMMISSION

Name of Clearing & Settlement Organization

CENTRAL SECURITIES & DEPOSITORY and CENTRAL REGISTRY of the CYPRUS STOCK EXCHANGE

Settlement Cycle

- On T+3 (T = Transaction Day) for Stock Exchange Trades that settle multilaterally

- From T until T+3 for Stock Exchange Trades that settle bilaterally

- OTC Trades are settled from T + 3 at defined time frames

Name of Central Securities Depository

CENTRAL SECURITIES & DEPOSITORY and CENTRAL REGISTRY of the CYPRUS STOCK EXCHANGE

Commissions on Transactions levied by Exchange

Taxes on Dividends, Interests

There is an exception for Interest not arising from the ordinary activities or closely related to the ordinary activities of the company.

Interest received by a CIS (closed-ended or open-ended) is taxed under income tax law after deducting expenses at the standard corporation tax rate of 10%.

Interest received by persons (individuals and companies) in the ordinary course of their business including interest closely connected to the ordinary course of business is taxed under income tax law after deducting expenses at the standard corporation tax rate of 10%.

Interest received by a person (individuals and companies) which does not satisfy the conditions prescribed immediately above is subject to special defence contribution (‘SDC’) without expense deduction at the rate of 10%.

Special defence contribution (‘SDC’)

Special contribution for defence is imposed on income earned by Cyprus tax residents. Non-tax residents are exempt from special contribution for defence. It is charged at the rates shown in the table below:

Notes

Dividend income from abroad is exempt from defence fund contribution. This exemption does not apply if:

more than 50% of the paying company’s activities result directly or indirectly in investment income and the foreign tax is significantly lower than the tax burden in Cyprus. The tax authorities have clarified through a circular that “significantly lower”, means a tax burden rate below 5%.

When the exemption does not apply, the dividend income is subject to special contribution for defence at the rate of 15%.

* Interest income from Cyprus government savings bonds and development bonds and all interest earned by a provident fund is subject to special contribution for defence at 3% (instead of 15%).

** In the case where the total income of an individual (including interest) does not exceed €12.000 in a taxable year, then the rate is reduced to 3%.

Tax treatment of units held in CIS

Units of closed-ended and open-ended CIS are considered as titles. Profit arising in the hands of any person (individuals and companies) from the disposal of titles is exempt from corporation tax and SDC. 

Collective Investment Schemes (“CIS”)

The following provisions are applicable only to Cyprus tax resident unit holders:

a) The SDC rate for dividend deemed distributions is 3%.

b) The SDC rate for dividend deemed distributions arising on liquidation is 3%.

c) Redemption of units or other interest in closed-ended or open-ended CIS is not subject to SDC.

2011 Share ownership thresholds (%)

Any legal or physical person that acquires or disposed the percentage of voting rights that owns, reaches or overcomes the limits of 5%, 10%, 15%, 20%, 25%, 30%, 50% and 75% or falls below these limits, then an announcement to the Stock Exchange and the Securities and Exchange Commission has to be made.

Short selling (Yes / No)

According to the Cyprus Securities and Stock Exchange Laws short selling is not prohibited but the sellers are obliged to have the securities on T+3 (settlement date). 

Short selling conditions (if any)

According to the Cyprus Securities and Stock Exchange Laws short selling is not prohibited but the sellers are obliged to have the securities on T+3 (settlement date).