Definition:
Reorganization is a merger, division, transfer of assets and exchange of shares, involving companies resident in Cyprus and/or Companies not resident in Cyprus.
General Provisions:
- Under the Scheme, the transfer of assets including provisions and
reserves will not give rise to any taxable gains for income tax purposes.
- The assets will be transferred at their Tax Written Down Value and
the receiving company will continue to claim allowances as if it was
the transferring company.
- Any tax losses can be transferred and utilized by the transferee,
the new company provided that the company is a Cyprus Tax Resident.
(Company also includes foreign companies with permanent establishment
in Cyprus.)
- Any gain accruing to the receiving company up-on cancellation of
the holding in the capital of the transferring company is outside the
scope of ant taxation.
- · Any new shares received by a shareholder in exchange of the
shares of the acquired company will not give rise to any taxable profits
and the new shares received will have the same tax value with the shares
exchanged at the time just before the reorganization.
- Tax duties and Capital gain tax is also irrelevant