Capital gains tax is imposed at the rate of 20% on gains from the disposal of immovable property situated in Cyprus including gains from the disposal of shares in companies which directly own such immovable property, excluding shares listed on any recognized stock exchange.

Further, as from 17 December 2015 shares of companies which indirectly own immovable property located in Cyprus and at least 50% of the market value of the said shares derive from such immovable property are subject to Capital Gains Tax. In the case of share disposals only that part of the gain relating to the immovable property situated in Cyprus is subject to Capital Gains Tax.

The gain that arises after deducting from the sale price the value of the property at 1 January 1980 or its cost of acquisition, if the land was purchased after 1 January 1980, as adjusted with the cost of living index is taxed at the rate of 20%. The gain is further reduced by other direct costs.

On 9 July 2015 the House of Representatives enacted into Law the following proposal which was published in the Cyprus Goverment Gazette on 16 July 2015:

• Subject to conditions, land as well as land with buildings acquired in the period 16 July 2015 up to 31 December 2016 will be exempted from Capital Gains Tax upon its future disposal subject to certain anti-avoidance provisions.

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.

For further details on these issues, please do not hesitate to contact us.