Executive Summaries
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Russia’s Tax Manoeuvres and Risks for Cyprus Companies
Cyprus Sun as Perpetuum Mobile for Power Plants
Tax treatment stability is essential for any business. However, during the financial crisis any government experiences a deficit of tax revenues, and therefore tries to find ways to raise money, including through adjusting both legislation and law enforcement. Russia is no exception. Many Cypriot companies of Russian citizens gain Russian-source income. Technically, most of them should be covered by the Double Tax Treaty. However, in 2014, the Ministry of Finance of Russia opposed the established practice and at a further stage changes to the relevant provisions of the Tax Code were introduced. A foreign company will be recognised as the actual income recipient only if it is the immediate beneficial owner of income and determines its further economic benefit. At the same time, the Tax Code does not provide with a list of documents to confirm the status of the actual income recipient. On May 17, the Federal Tax Service of Russia issued a Letter No. CA-4-7/9270@. It is mandatory for use by the tax authorities and describes the approaches of the Federal Tax Service and arbitration courts in applying the concept of an actual right to income in international tax relations. So, what is the procedure and terms for information interaction between state authorities and legal entities as regards sending requests and submitting the relative information on beneficiary owners or on measures taken for their establishment? How do tax authorities identify the company's non-compliance with the actual-right-to-income test? What should a Cyprus company do to get a Russiansource income with a reduced tax rate or with no Russian taxation? We will discuss all these and other ‘hot’ issues at the seminar titled “CYPRUS UNDER PRESSURE: THE FUTURE IS DEFINED TODAY’, to be held in Limassol on October 25.
On May 11, a new photovoltaic park was inaugurated in Nisou, on the outskirts of Nicosia, having become one of the largest in Cyprus. This park is part of the Green Energy Group project for the construction of solar power plants with a total capacity of 11.9 MW. Chairman of the Board of Directors of the Green Energy Group, Dmitry Morozov, talks on the development of solar energy on the island. By 2020 the total photovoltaic capacity of solar power plants built in Cyprus should reach 200 MW. So far, the capacity is 134 MW, including the new GEG plants, and there are three years left to complete the task. The construction cost amounts to about one million euro per megawatt. In other words, Cyprus will need another 60 million euro of investment in the solar energy sector. GEG became the first Cyprus private company to enter the EBRD's pool of projects. In total, the EBRD has financed five GEG solar parks up to now. In Cyprus, energy production, distribution, and retail sales were the government’s monopoly. Then came private companies engaged in renewable energy sources, such as GEG. However, for an island with such a sunny climate, Cyprus does not fully exploit its resources. Previously, the produced energy could not be stored due to lack of technology. Now the technology does exist. For example, if you raise water to an altitude in the daytime with plenty of sun, and let it run through turbines in the evening, you will get a hydroelectric power station. Such a project pays off in about ten years. In the near future, GEG plans to launch solar plants with a total capacity of about 25 MW. Each generator’s capacity will range from 5 to 10 MW, and they will be installed in different areas of the island. The company is also engaged in the supply of photovoltaic panels, power systems audit and maintenance of other solar parks.
Demetris Syllouris:
From Now on Laws will be Adopted Faster
Demetris Syllouris commenced his duties as the President of Parliament in June 2016. In his interview, he talks about what has been done during this year and what is still scheduled to be actioned in the work of the House of Representatives. When substituting for the President during his absence in the country, Syllouris feels a burden of responsibility, the need to make well-considered decisions. At the same time, he has to be more objective and listen to all opponents. According to Syllouris, July 16 will be an important breakthrough day for the legislature: this is the day that the Cyprus Parliament will join the cloud service and be able to increase the speed of internal communication tenfold. For several months now the Parliament has enjoyed electronic access to thousands of documents along with an electronic voting system. Another change is the shift of the parliamentary meeting to Friday morning. Now that the members of Parliament have one more day to prepare, the deputies’ productivity has increased. A number of new rules are on the way for implementation, including a reduction in the number of parliamentary committees from 16 to 12. Another innovation is to promote the bills which have been listed for years. Otherwise, they will be deleted from the waiting list. In an effort to introduce new technologies to the work of the Parliament, Syllouris developed a system according to which 51% of the success of the implementation of e-Parliament has been gained via conducting trainings among deputies and changing their mentality. Syllouris urged the Russian-speaking community of Cyprus to not be observers but active participants in the life of the country. They should play an active role in Cypriot society and be equal members of society as Russianspeaking Cypriots. Successful Business
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