course content
10/07/2025: 09:00 a.m. - 12:30 a.m.
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.
- 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
