NEW STAMP DUTY PAYMENT PROCEDURE BASED ON THE CONTRACT VALUE

The Tax Department of the Ministry of Finance of the Republic of Cyprus has announced an amendment to the Stamp Duty payment procedure on Contracts based on the value of the Contract effective from the 27/07/2020. This amendment is applicable to Real Estate Lease Agreements, Employment Contracts, any Contracts between two legal entities and Contracts with a fixed contract value (e.g. Sale-Purchase Agreements, Construction Agreements, Loans, Public Contracts). This new procedure applies only in relation to the principal Contracts and not to any Additional Agreement/Addenda/Supplementary Agreements to such Contracts.

NEW PROCEDURE:

1.Special Stamp Duty Calculation Tool: For the needs of this new procedure a special calculation tool has been developed and uploaded to the official website of the Tax Department under “Direct Taxation/Other Information/Stamp Duty Calculation Tool or at the following link:

https://www.mof.gov.cy/mof/tax/taxdep.nsf/All/F146B5BEFF030663C22585B20026EBOC?O penDocument

2.Stamp Duty payable on Contracts when the Stamp Duty payable does NOT exceed the amount of €100 (one hundred euros)

Timely payment of the Stamp Duty (within not more than 30 days from the date of signing or draffing of the specific document)

The interested party should:

i.Calculate the Stamp Duty payable by using the “Stamp Duty Calculation Tool”.

ii.Forward via email to the Tax Department a copy of the form “Stamp Duty Calculation”, as it appeared on the user’s screen depicting the calculated amount of the Stamp Duty payable.

iii.Purchase stamps with total face value corresponding to the calculated amount of the Stamp Duty payable, from the authorized selling points.

iv.Affix the relevant stamp(s) on the document’s first page and cancel them by drawing thereon two diagonal lines in parallel and inserting the date of the cancelation under the diagonal lines.

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Late Stamp Duty payment

In case payment of the Stamp Duty for the documents as described above does not take place within 30 days from the date of execution or drafting of the document, the above procedure is not applicable, and penalties are imposed. More specifically, in case of late payment of the Stamp Duty which takes place not more than 30 days after the expiration of the initial time frame set, a penalty equal to the amount of the Stamp Duty as calculated, is imposed. In case of late payment of the Stamp Duty which takes place on a date over 30 days after the expiration of the initial time frame set, a penalty equal to double the amount of the Stamp Duty as calculated, is imposed. Payment of the relevant amount of the Stamp Duty and imposed penalties must be made in the presence of either an authorised representative of the Tax Office at the relevant District Tax Office or at the presence of a District Court’s Registrar who shall validate the payment of the relevant Stamp Duty.

3.Stamp Duty payable on Contracts when the Stamp Duty payable exceeds the amount of €100 (one hundred euros).

The interested party should:

i.Calculate the Stamp Duty payable by using the “Stamp Duty Calculation Tool”

ii.Print out the form “Stamp Duty Calculation”, as it appeared on the user’s screen depicting the calculated amount of the Stamp Duty payable, present the hard-copy of the form to the District Office of the Tax Department for payment of the Stamp Duty (payment code 0800) and purchase stamps with total face value corresponding to the calculated amount of the Stamp Duty payable.

iii.Present the purchased stamps and payment receipt to the responsible Stamp Duty Officer of the relevant District Tax Office. Such Authorised Officer will affix the stamps and stamp the document accordingly.

NOTE:

Correct payment of any Stamp Duty payable is an obligation of the taxpayer (self taxation). The Tax Officer reserves the right to conduct any inspections deemed necessary to ensure the compliance with the relevant Stamp Duty tax obligations.