Archive for September, 2016

WORLD MARITIME DAY 2016 – “SHIPPING: INDISPENSABLE TO THE WORLD”

And the date has been set… the Shipping Industry is to celebrate the World Maritime Day on the 29 September 2016. This year’s theme, “Shipping: Indispensable to the World”, has been inspired from stories of our everyday lives as the IMO tells.

Once upon a time…..a TV arrived in a containership; the grain that made the bread in that sandwich came in a bulk carrier; the coffee probably came by sea, too. Even the electricity powering the TV set and lighting up the room was probably generated using fuel that came in a giant oil tanker.

And the story never ends… DID YOU KNOW THAT:

  • As highlighted by United Nations Conference on Trade and Development (UNCTAD), around 70-80% of global trade by volume and by value are carried by sea and are handled by ports worldwide;
  • In 2015, around 90,000 vessels constituted the world’s commercial fleet consisted, with a total carrying capacity of some 1.75 billion dwt. This fleet is registered in more than 150 nations and is manned by more than a million seafarers of virtually every nationality;
  • Grain carried by a single ship is enough to feed nearly 4 million people for a month; another ship can carry enough oil to heat an entire city for a year, and others can carry the same amount of finished goods as nearly 20,000 heavy trucks on the road.
  • In 2014, according to UNCTAD, the industry shipped 9.84 billion tonnes of cargo for an estimated 52,572 billion tonne-miles of trade – a truly staggering statistic;
  • According to UNCTAD the operation of merchant ships contributes about US$380 billion in freight rates within the global economy, equivalent to about 5% of the total world trade.

What is more than true is that shipping affects us all. Wherever you are, if you look around you, you are certainly going to see something that has been transported by sea. This is a story that needs to be told and this is the reason for this year’s Maritime day’s theme. Maritime transport can be fairly considered as the backbone of international trade and the global economy. Globalization is a fact; the economy is developing, the world population is doubling and the countries need to follow up. Shipping has always been, and will remain, servant of the world’s economy.

Additionally, in terms of environment protection, shipping can fairly be considered as driver of “green growth”, given its impressive environmental performance. Due to IMO’s strict controls on discharges and emissions and regulatory regime, both accidental and operational pollution from ships has steadily diminished over many decades.

Overall, as highlighted by IMO’s notice it is unfortunate that despite the standards of living in the industrialized and developed world, and the jobs and livelihoods of billions in the world depending on ships and shipping, yet most of the people remain blissfully unaware of how much they rely on it and how much it shapes their lives. With that in mind, shipping has to tell its story: the story of an industry that, in terms of efficiency, safety, environmental impact and its contribution to global trade is unmatched by any other transport sector; the story of shipping – which is, truly, indispensable to the world.

Circular 2016/12 – Tax Department: Exemption from the Special Contribution for the Defense Tax on bank accounts

On the 16th of September 2016, the Tax Department issued a circular with regards to the exception from Special Contribution for Defense tax, that is available to owners, charterers or managers of ships who are taxed by virtue of the Merchant Shipping (Fees and Taxing Provisions) Law of 2010 (the “Law).

Article 8(d) of the Law, which regulates the shipowner’s taxation, provides that “No tax shall be imposed or collected ….. (d) other than interest on moneys kept for investment, upon any interest earned on working capital and/or revenue earned by a qualifying owner from a relevant qualifying shipping activity on bank accounts , if such working capital or revenue is used to pay expenses for the financing and/ or the operation and/ or the maintenance of the ship.”

Identical exception is provided for charterers and managers under articles 20(d) and 30 (d).

As per the relevant Circular, the exemption deriving from the above-mentioned articles concerns all taxes, including income tax and special contribution for defense on interest received by or credited to eligible owners, charterers and ship managers in:

  1. Bank accounts that are being used as working capital; or
  2. Bank accounts whose deposited capital constitutes income which derives exclusively from eligible shipping activities,

provided that the relevant bank accounts are being used exclusively for the funding of the eligible shipping activity of the beneficiaries.

It is highlighted that no tax exemption is granted on interest of capital which is being used for investment or for any purpose other than the funding of the eligible shipping activity, even though the capital derives from income of the eligible shipping activity.

Furthermore, no tax exemption is applied on interest of bank accounts of which the beneficiary is not an eligible shipowner, charterer or ship manager.

The provisions of the Taxation of Income Law N.44(I)/2010, as amended, and of the Special Contribution for the Defense of the Republic Law N.117(I)/2002, as amended, is applicable to all other interest which does not fall within the scope of articles 8(d), 20(d) or 30(d).

The interest which is tax exempted under the abovementioned articles concerns interest of the following bank accounts:

  1. Existing accounts of the eligible shipowners, charterers or ship managers;
  2. Any bank account, including the accounts of the eligible shipowners, charterers or ship managers, in which the deposited capital constitutes income exclusively deriving from eligible shipping activity;
  3. Existing bank accounts in the name of Companies of Specific Purpose which are incorporated in order to facilitate the management of the eligible shipping income with the eligible shipowners, charterers or ship managers being the beneficiaries of them;
  4. Any bank account, including the accounts in the name of Companies of Specific Purpose which are incorporated in order to facilitate the management of the eligible shipping income, in which the deposited capital constitutes income exclusively deriving from eligible shipping activity, with the eligible shipowners, charterers or ship managers being the beneficiaries of the accounts.

The eligible shipowner, charterer or ship manager would have to submit a declaration to the bank in which he holds a bank account in order to benefit from the exemption from the special contribution for the defense tax. The relevant declaration shall make reference only to the bank accounts that are eligible to benefit from the tax exemption as provided above. In case that only a part of the funds of the account is eligible for tax exception, the shipowner, charterer or ship-manager may request return of the Special Contribution for the defense tax which corresponds to that amount.

 

Circular 2016/12 – Tax Department: Exemption from the Special Contribution for the Defense Tax on bank accounts

On the 16th of September 2016, the Tax Department issued a circular with regards to the exception from Special Contribution for Defense tax, that is available to owners, charterers or managers of ships who are taxed by virtue of the Merchant Shipping (Fees and Taxing Provisions) Law of 2010 (the “Law).

Article 8(d) of the Law, which regulates the shipowner’s taxation, provides that “No tax shall be imposed or collected ….. (d) other than interest on moneys kept for investment, upon any interest earned on working capital and/or revenue earned by a qualifying owner from a relevant qualifying shipping activity on bank accounts , if such working capital or revenue is used to pay expenses for the financing and/ or the operation and/ or the maintenance of the ship.”

Identical exception is provided for charterers and managers under articles 20(d) and 30 (d).

As per the relevant Circular, the exemption deriving from the above-mentioned articles concerns all taxes, including income tax and special contribution for defense on interest received by or credited to eligible owners, charterers and ship managers in:

  1. Bank accounts that are being used as working capital; or
  2. Bank accounts whose deposited capital constitutes income which derives exclusively from eligible shipping activities,

provided that the relevant bank accounts are being used exclusively for the funding of the eligible shipping activity of the beneficiaries.

It is highlighted that no tax exemption is granted on interest of capital which is being used for investment or for any purpose other than the funding of the eligible shipping activity, even though the capital derives from income of the eligible shipping activity.

Furthermore, no tax exemption is applied on interest of bank accounts of which the beneficiary is not an eligible shipowner, charterer or ship manager.

The provisions of the Taxation of Income Law N.44(I)/2010, as amended, and of the Special Contribution for the Defense of the Republic Law N.117(I)/2002, as amended, is applicable to all other interest which does not fall within the scope of articles 8(d), 20(d) or 30(d).

The interest which is tax exempted under the abovementioned articles concerns interest of the following bank accounts:

  1. Existing accounts of the eligible shipowners, charterers or ship managers;
  2. Any bank account, including the accounts of the eligible shipowners, charterers or ship managers, in which the deposited capital constitutes income exclusively deriving from eligible shipping activity;
  3. Existing bank accounts in the name of Companies of Specific Purpose which are incorporated in order to facilitate the management of the eligible shipping income with the eligible shipowners, charterers or ship managers being the beneficiaries of them;
  4. Any bank account, including the accounts in the name of Companies of Specific Purpose which are incorporated in order to facilitate the management of the eligible shipping income, in which the deposited capital constitutes income exclusively deriving from eligible shipping activity, with the eligible shipowners, charterers or ship managers being the beneficiaries of the accounts.

The eligible shipowner, charterer or ship manager would have to submit a declaration to the bank in which he holds a bank account in order to benefit from the exemption from the special contribution for the defense tax. The relevant declaration shall make reference only to the bank accounts that are eligible to benefit from the tax exemption as provided above. In case that only a part of the funds of the account is eligible for tax exception, the shipowner, charterer or ship-manager may request return of the Special Contribution for the defense tax which corresponds to that amount.

 

Measures to improve compliance of ships flying the Cyprus Flag calling in ports of the United States of America (USA)

Further to Circular no 27/2016 of the Department of Merchant Shipping (the “DMS”), issued on the 9th of September 2016, due to the constant increase in the number of ships that are flying the Cyprus flag being detained in USA ports, the DMS decided to introduce some measures in order to improve compliance of the ships and to remove Cyprus from the United States Coast Guard (the “USCG”) Target List (safety). The relevant measures will be applicable for all ships flying the Cyprus Flag calling in USA ports from the 1st of October 2016.

Accordingly, all ships flying the Cyprus Flag calling in USA ports are required to forward the below-mentioned documents to the DMS (shipcontrol@dms.mcw.gov.cy):

  • a copy of the Notice of Arrival (NOA) when communicating the aforesaid information to the USCG;
  • at least 24 hours prior to arrival in a USA port, the form shown in Annex 1 duly completed and signed.

    Please see here the pre-arrival-checklist

For more information refer to:

 

New Criteria and Procedure for Cyprus Citizenship by Investment

On the 13/9/2016, the Council of Ministers announced the implementation of an updated procedure and a series of financial criteria for investors wishing to obtain the Cyprus Citizenship. The new criteria are even more favorable than before with the minimum necessary amount of investment having been reduced from €2.500.000 to €2.000.000.

Under the new procedure, the investors are given several options as to how they can invest in the Republic of Cyprus, providing greater flexibility.

Even though the new criteria have immediate effect, already submitted applications will be based on the provisions as were applicable at the time of submission. However, investors who already submitted their applications, have the possibility of withdrawing and applying anew based on the new criteria as of 13/9/2016.

Potential applicants will have a choice as to which of the two schemes they would like to apply for under until the 31/10/2016. From the 1/11/2016, only the new criteria will be applicable for the Cyprus Citizenship by investment scheme.

NEW FINANCIAL CRITERIA:

  • INVESTING IN REAL ESTATE DEVELOPMENTS AND INFRASTRUCTURE

The applicant should make an investment of at least € 2.000.000 for the purchase or construction of im- movable property whether residential or commercial, and whether related to the tourism sector or otherwise, including investment in land.

  • PURCHASE OR INCORPORATION OR PARTICIPATION IN CYPRIOT BUSINESSES AND COMPANIES

The applicant should purchase, incorporate or participate in companies established and operating in the Re- public of Cyprus with investment costs of at least €2.000.000. These invested funds will be channeled to finance the investment objectives of the Companies, according to their business plan.

Additionally, the companies must have physical presence in Cyprus, with significant activity and turnover, and must employ at least five Cypriot or European citizens.

  • INVESTING IN CYPRUS ALTERNATIVE INVESTMENT FUNDS (AIF’S) OR FINANCIAL ASSETS OR CYPRIOT ORGANIZATIONS LICENSED BY THE CYPRUS SECURITIES AND EXCHANGE COMMISSION, “CYSEC”

The applicant should invest in units of at least € 2.000.000 of AIF’s established, licensed and supervised in Cyprus by “CYSEC”. Such investments should be made exclusively in Cyprus and should meet the criteria of this scheme and be approved by the Minister of Finance.

Acquisition of financial assets in Cypriot businesses or organizations of at least € 2.000.000, such as bonds, bills and securities issued by companies that have demonstrated physical presence and substantial economic activity in Cyprus, should be maintained for a period of 3 years.

  • COMBINATION OF THE ABOVE INVESTMENTS

The applicant may make a combination of the above investments, provided that the total investment will amount to at least € 2.000.000.

Under this criterion, the investor may also invest in government bonds of Cyprus for the amount up   to

€ 500.000, which will be issued for this purpose by the Public Debt Management Office of the Ministry of Finance, for a period of at least 3 years.

TERMS AND CONDITIONS:

CLEAN CRIMINAL RECORD: The applicant should have clean criminal record.

RESIDENTIAL PROPERTY: The applicant should own a residential property of at least €500.000 + VAT.

RESIDENCY IN CYPRUS: The applicant, before the naturalization as Cypriot Citizen, must hold a residency permit in Cyprus for a period of at least 6 months.

*A detailed analysis of the Cyprus Citizenship by Investment will be provided in a forthcoming newsletter.

Please see more information below:

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We are proud to announce that we have been awarded by Finance Monthly the Intellectual Property Law Firm for the Year – Cyprus award for 2016

We are proud to announce that Finance Monthly has selected Christodoulos G. Vassiliades & Co LLC as the receiver of the Intellectual Property Law Firm for the Year – Cyprus award for 2016.

The Finance Monthly Global Awards report on all financial and legal matters through the monthly magazine and online Finance Monthly. For the seventh consecutive year, the Finance Monthly Global Awards are one of the most sought after industry awards. Celebrating innovation and excellence, readers are asked to submit their recommendations of those firms and individuals showing market intelligence and client insight. This makes the Finance Monthly Global Awards 2016 one of the most highly sought after industry accolades.

There is an in depth research of the financial and legal industries which leads them to recognise high achievers and single them out for praise. Combining the understanding of the sector with the interaction of their readers enables them to produce a comprehensive list of the great and the good from the financial and legal worlds. Above all, the Finance Monthly Global Awards highlights firms and individuals that have outperformed the market and their peers.logo finance monthly1

As of 2008, our Intellectual Property Department has been dedicated in protecting all forms of Intellectual Property Rights be it trademarks, designs, patents and trade names or unregistered such as copyrights or reputable marks. We also handle passing off actions, trademark litigation and arbitration cases and undertake the preparation, drafting, negotiation and advising on all types of Intellectual Property- related agreements. The broad spectrum of services we offer allows our clients to rely on us for all their Intellectual Property matters, worldwide.

2016 proves to be an extremely successful year for us and we have shown once again excellence not only in our expertise but in service.

We pride ourselves in providing excellent service to all our clients and are particularly pleased when our efforts are recognised and rewarded.