12 March 2024 Cyprus publishes 10-year government bond yield rates for notional interest deduction purposes On 7 March 2024, the Cypriot Tax Department issued an announcement that lists the 10-year government bond yield rates as of 31 December 2023 for a number of countries (listed in the table below) with respect to the notional interest deduction (NID) on equity. These yield rates should be used to determine the reference interest rate for claiming NID for the 2024 tax year. The key NID provisions and the applicability of the 10-year government bond yield rates are summarized below. Notional interest deduction As of 1 January 2015, Cyprus tax-resident companies (as well as foreign companies with permanent establishments in Cyprus) that carry on a business are entitled to claim an NID on their equity capital introduced on or after 1 January 2015. The NID is deducted from the company's taxable income for the relevant tax year (subject to any restrictions) for the period of time during which the company used the equity in carrying on its activities. The NID is subject to a number of conditions, including a taxable-income limitation. The NID equals the multiple of the "reference interest rate" (as defined below) and "new equity." "Reference interest rate" means the 10-year government bond yield of the country in which the new equity is invested, as of 31 December of the year preceding the tax year, increased by 5%. 10-year government bond yield rates1 as of 31 December 2023 (applicable for 2024 tax year)2 Country | Yield rate | Country | Yield rate | Abu Dhabi | 3.966 | Jordan (US$) | 7.644 | Albania | 6.440 | Kazakhstan (€) | 3.775 | Albania (€) | 5.418 | Kazakhstan (US$) | 5.495 | Angola (US$) | 10.924 | Kenya | 15.620 | Argentina | 17.339 | Kuwait | N/A* | Armenia | N/A* | Latvia | 3.263 | Australia | 3.955 | Lebanon | N/A* | Austria | 2.580 | Lithuania | 3.317 | Azerbaijan (US$) | 5.395 | Luxembourg | 2.809 | Bahrain (US$) | 7.609 | Malaysia | 3.736 | Belarus (US$) | 42.800 | Malta (€) | 3.680 | Belgium | 2.604 | Mauritius | 4.900 | Bermuda (US$) | 5.100 | Mexico | 8.938 | Bosnia and Herzegovina | N/A* | Mexico (€) | 4.194 | British Virgin Islands | N/A* | Mexico (US$) | 5.456 | Bulgaria | 4.208 | Moldova | N/A* | Canada | 3.813 | Morocco | 3.691 | Cayman Islands | N/A* | Netherlands | 2.322 | Chile | 5.478 | New Zealand | 4.321 | Chile (€) | 3.450 | Nigeria | 14.540 | Chile (US$) | 4.889 | Nigeria (€) | N/A* | China | 2.557 | North Macedonia (Skopje) (€) | 5.177 | Colombia | 9.957 | Norway | 3.262 | Colombia (US$) | 6.746 | Oman (US$) | 5.402 | Costa Rica | 6.936 | Pakistan | N/A* | Croatia | 3.190 | Pakistan (US$) | 15.287 | Cyprus | 3.250 | Panama (US$) | 6.675 | Czech Republic | 3.752 | Poland | 5.191 | Denmark | 2.248 | Portugal | 2.620 | Dubai (€) | N/A* | Qatar (US$) | 4.182 | Dubai (US$) | 4.632 | Romania | 5.633 | Egypt | 24.987 | Russia | 11.440 | Egypt (US$) | 13.651 | Russia (US$) | N/A* | Estonia | 2.978 | Saudi Arabia | 4.729 | Finland | 2.563 | Serbia | 6.264 | France | 2.557 | Singapore | 2.691 | Georgia | 8.425 | Slovakia | 3.175 | Germany | 2.021 | Slovenia | 2.882 | Guernsey | N/A* | South Africa | 11.773 | Ghana | 40.540 | Spain | 2.981 | Ghana (US$) | 22.845 | Sweden | 2.027 | Greece | 3.042 | Switzerland | 0.653 | Hong Kong | 2.907 | Taiwan | 1.213 | Hungary | 5.870 | Tunisia | N/A* | India | 7.185 | Turkiye | 23.600 | Indonesia | 6.454 | Turkiye (€) | 4.565 | Indonesia (US$) | 4.916 | Turkey (US$) | 7.120 | Indonesia (€) | 3.928 | United States | 3.879 | Iraq | N/A* | Ukraine | N/A* | Ireland | 2.352 | Ukraine (€) | 35.935 | Isle of Man | 4.514 | Ukraine (US$) | 39.591 | Israel | 3.945 | United Arab Emirates | N/A* | Israel (US$) | 5.146 | United Kingdom | 3.537 | Italy | 3.690 | Uruguay | 9.516 | Ivory Coast | N/A* | Uruguay (US$) | 4.734 | Jamaica (US$) | 7.372 | Uzbekistan (US$) | 6.524 | Japan | 0.608 | Vietnam | 2.167 |
* There are currently no government bond yield rates for these countries. | * * * * * * * * * * |
Endnotes1 The 10-year government bond yield rate of each country is in local currency unless otherwise denoted in the table. 2 The Cypriot Tax Department updates the list during the year. As such, it is advisable to check their website for announcements of new additions to the list. Please visit: Tax Department | Announcements (mof.gov.cy). | | * * * * * * * * * * | | Contact Information | For additional information concerning this Alert, please contact: EY Cyprus Advisory Services Limited | | Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor |
Document ID: 2024-0579 | 
