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Income Tax Law – Amendment in relation to incentives to reduce rent

Fidescorp Limited > Updates > Income Tax Law – Amendment in relation to incentives to reduce rent

On 2nd June 2020, an amendment of the Cyprus Income Tax Law has been published in the Official Gazette with respect to tax relief that landlords may claim on rental income subject to voluntarily reducing the rent payable by tenants.

According to the amendment, a landlord may claim a tax credit against their income tax charge for 2020 equal to 50% of the rent reduction voluntarily agreed. Any tax refund that may arise as a result of the tax credit cannot exceed the amount of tax already paid.

Eligibility for the tax credit is subject to the below conditions:

  1. the monthly rent reduction is not lower than 30% or higher than 50% of the existing monthly rental;
  2. the rent reduction applies for a period that does not exceed 3 months and falls within 2020;
  3. the reduction is put in writing between the landlord and the tenant;
  4. the landlord and the tenant are not related parties.

Out tax team is ready to assist if you have any questions or require any assistance in relation to this development.