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March 12, 2024
2024-0579

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.

* * * * * * * * * *
Endnotes

1 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
 
 

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