Stamp duty is a one-off tax fee that is charged for different types of contracts that are worth more than a set amount. Payment of this tax is governed by the relevant land legislation and enforced by the Commissioner of Taxation in Cyprus.
Failure to Pay Stamp Duty
Failure to pay the stamp duty within the given timeframe (usually it is the first six months from signing the relevant documents) a small fine is imposed for each day of non-payment.
When a transaction involves more than one supporting document, only the main document is required for the payment of stamp duty.
Exemption from Payment
However, any contractual agreements, mortgages or other documents that are created and approved for loan restructuring purposes are exempt from having to pay for an amount up to the balance of the debt at the time of the loan restructure. This exemption is valid for a timeframe of two years from the publication of the relevant legislation.
Who Does the Burden of Payment Fall on in Different Contractual Scenarios?
The Law specifies that in the burden of payment falls on the following individuals, in the event that no express agreement has been signed:
- The stamp duty is paid by the issuer or the signatory of the document for bills of exchange or letters of guarantee.
- The stamp duty is paid by the insured individual for insurance policies.
- The stamp duty is payable by the investor for contracts regarding the shares of a company or any other legal entity.
- The stamp duty is paid by the company in the event that a charge is created against a company.
- The stamp duty is paid by the contractor for construction contracts or technical project agreements.
- The stamp duty is paid by the buyer for contracts of sale.
- The stamp duty is paid by the renter for rental contracts and leases.
Annex One of the Cyprus Stamp Duty Law specifies the amount payable for any applicable transaction, which is calculated on the value of the relevant contract or document.
For contracts of undefined value and agreements in Cyprus, where no provisions were made for the payment of stamp duty, a general fee of €35 is payable, for leases of movable or immovable property, the rental sum and the lease period are taken into consideration, however when the lease is for an indefinite timeframe, the applicable stamp duty is calculated on the basis of the total value of the rent for one hundred years.
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