The “Maritime Cyprus 2015” Conference was held with great success from the 13th – 16th September in Limassol, Cyprus.
More than 800 distinguished participants, from across the globe, attended the Conference, establishing it as one of the most well respected and popular shipping conferences worldwide.
The topics of the discussions were most interesting focusing on “Politics & Economics”, “The New Shipping Environment”, “The New World Order” and “Challenging the Leadership Process”, the latter being addressed to the younger executives attending the meeting.
Cyprus Ministry of finance announced few days ago that on the 2nd of July 2015 negotiations took place, concluding a Protocol that will amend the Convention for the Avoidance of Double Taxation and the prevention of fiscal evasion with respect to taxes on income. According to the announcement, the agreed protocol when signed will come into effect not earlier than the 1st January 2019, date at which the existing Convention will expire. The existing Convention has been signed on the 8th of November 2012 and entered into force on the 1st of January 2014.
During the negotiations a most favorable nation clause has been agreed, for the taxes on interest, dividends, royalties and capital gains. This clause is considered of high importance as Cyprus will be treated equitably with other jurisdictions.
As noted, the text has been agreed between the two negotiating teams of the Contracting States and will contribute to the further development of the trade and economic links between Cyprus and the Government of Ukraine, as well as with other countries.
The announcement concludes by stating that, “Upgrading and expanding the network of Double Tax Conventions, is of high economic and political importance and aims to further strengthen and attract foreign investment in Cyprus as its standing an international business center is elevated”.
* A detailed analysis of the Protocol will be released in a forthcoming newsletter.
Registration of Ship Mortgages
The Firm is committed to providing high quality service in the field of Shipping Law. It offers legal services to ship owners, charterers, ship managers and ship financing institutions. Advice is given on the sale/ purchase of vessels, ship registration, charter agreements, ship financing and registration of mortgages. In a ship mortgage, a debtor (mortgagor) provides a creditor (mortgagee) an interest in a ship as security for the repayment of a loan or the performance of some other obligation.
There are various advantages of Maltese mortgages, some of which including the following. Mortgages have a high ranking form of security and they constitute executive titles. They may be assigned or amended. In the case of an assignment, the assignee of part of a debt or other obligation secured by a registered mortgage of a ship or share can demand that the assignment be entered in the register of the particular ship for the part so assigned. With regards to amendments, when a registered mortgage is amended, such amendment shall form an integral part of the registered mortgage and such amended mortgage shall have the same priority as it had before such amendment was noted. An amendment of a mortgage shall be effected for example in order to increase the amount of capital secured by such mortgage. A registered mortgage of a ship or share may be transferred to any person by an instrument of transfer executed by the transferor in the presence of, and attested by, a witness or witnesses. A ‘power of attorney’ may be granted to the Mortgagee in addition to the mortgage as a form of added security, which will only apply in case of default on the part of the Mortgagee.
A mortgage over a Maltese ship shall have effect towards third parties only once it is duly recorded in the Register. Mortgages are recorded by the Registrar in the order in time in which they are produced to him for registration. If there are more mortgages than one registered in respect of the same ship or share, the mortgages shall be entitled in priority, one over the other, according to the date and time at which each mortgage is recorded in the register. Through a memorandum under his hand, the Registrar has to notify on each mortgage, that such mortgage has been recorded by him and has to state the day and hour of that record. In the case that the mortgage instrument states that it is prohibited to create further mortgages over a vessel without the prior written consent of the mortgagee, the registrar shall not record such further mortgage unless the consent in writing of the holder of a prior mortgage is produced to him. Any mortgage that is registered in violation of this is null and void. If a further mortgage is executed in favour of an existing mortgagee, the mortgagee’s consent shall not be required. In the case that the mortgage instrument states that it is prohibited to effect the transfer of the ship that is being mortgaged, or of a share therein, without the previous written consent of the mortgagee, the registrar shall not record any transfer of such ship or of a share therein unless the consent in writing of such mortgagee is produced to him, saving where the transfer is made pursuant to a court order in a sale by auction of such a ship or pursuant to any other court order. Any transfer that is registered in violation of this is null and void.
Rights of Mortgagee
In the event of default of any term or condition of a registered mortgage or of any document or agreement referred to therein, the mortgagee shall, upon giving notice in writing to the mortgagor, be entitled a) to take possession of the ship or share therein in respect of which he is registered; b) have power absolutely to sell the ship or share in respect of which he is registered; and c) have power to apply for any extensions, pay fees, receive certificates, and generally do all such things in the name of the owner as may be required in order to maintain the status and validity of the registration of the ship.
Maltese Mortgage Form and Deed of Covenants
Ship mortgages may be registered in the Registry of Shipping by filing a Mortgage Deed. Apart from this mortgage deed, there is a deed which complements the mortgage form which is the ‘deed of covenants’. It contains certain provisions which cannot be included in the mortgage form. It contains provisions regarding the mortgagee’s right to carry out inspections on the vessel, the mortgagor’s obligation to provide the mortgagee with certain information and so on.
Foreign mortgages are recognised as mortgages with the status, rights and powers specified in the Merchant Shipping Act provided that certain conditions are met. The mortgage (i) must have been validly recorded in the registry of ships of the country under those laws the ship is documented, (ii) the registry is a public registry, (iii) the mortgage appears upon a search of the registry and (iv) such mortgage is granted a preferential and generally equivalent status as a mortgage under the Merchant Shipping Act under the laws of the country where the mortgage is registered.
Cyprus Ministry of Finance announced that a meeting took place on the 11th of September, between the Permanent Secretary of Cyprus Ministry of Finance and the Deputy Minister for Foreign Affairs of the Socialist Republic of Vietnam. Mr. Bui Thanh Son, the Head of Delegation team of Vietnam visited Cyprus for Advancing Economic Cooperation between the two countries.
Both parties agreed that a potential conclusion of a Convention for the Avoidance of Double Taxation would be prosperous for both countries.
Negotiations between the two counties are expected to take place within 2015 and it is to contribute to further development of the commercial and financial relations between
Cyprus and the Socialist Republic of Vietnam and other countries. Expansion and upgrading the network of Double Taxation Agreements, is of high economic and political importance and aims to further strengthen and attract foreign investment and elevates the importance of Cyprus as an international business center.
In an effort to enhance the competitiveness, fairness and simplicity of the Cyprus Tax system and make it more attractive to foreign investors, the Cyprus Government passed on the 9th of July 2015 among others the introduction of “Domicile” concept. The introduction of the non-domicile rules aims to attract high-earners relocate to Cyprus and use Cyprus as a business centre, by transferring the headquarters of their business and creating real substance.
The Case before the Amendment of the Law
An individual who spends a period or an aggregated period of more than 183 days in a tax year in the Republic of Cyprus is subject to both Income Tax and Special Defence Contribution (SDC). Domestic or foreign-sourced income of a Cyprus resident, taking the form of dividends, interest or rent was subject to SDC.
The Amendment of the Special Defence Contribution
According to the amendment of the Law and the non-domicile rules introduced, an individual who is a tax resident of Cyprus under the provisions of the Income Tax Law (183 days rule mentioned before) BUT he is “not-domiciled” in the Republic of Cyprus, will be exempt from SDC.
Christodoulos G. Vassiliades & Co. LLC is pleased to share its detailed Vessel Registration Guide in relation to the following jurisdiction in which we provide relevant services:
- The Cyprus Ship Registry
- The Belize Ship Registry
- The Malta Ship Registry
- The Marshall Islands Ship Registry
- The Panama Ship Registry
- The Liberian Ship Registry
CGV Vessel Registration Guide
Law 4251of 2014, also referred to as the Immigration and Social Integration Code, (as amended on 9th July 2015, and hereinafter referred to as the “Law”), provides the opportunity to non- European Union nationals to obtain a permanent residence permit by investing in real estate in Greece.
- Possibility to stay in Greece continuously for the entire duration of the residence permit and to have access to public health and education, in the same terms and conditions as Greek citizens.
- Possibility to travel freely within the Schengen area, without a visa, provided that the stay in the said countries does not exceed 90 days per six- month period, with a right to multiple entries, without it being required to enter the Schengen area through Greece.
- Possibility to lease the real estate property or properties acquired in Greece and receive rent.
- Possibility to renew the residence permit as many times as the applicant wishes (so long as the conditions required by the Law remain fulfilled) for 5- year periods.
- Absences from Greece do not impede the possibility for renewal of the residence permit.
- Possibility to enter into the regimes for long- term residency or acquire the citizenship provided that the specific conditions required by law for accessing those regimes are fulfilled in addition.
Further to the adoption by the Greek Parliament of Law 4336 of 2015 under the title Pension Provisions- Ratification of the Draft Agreement for Financial Assistance by the European Stability Mechanism and provisions for the implementation of the Financing Agreement on 14th August 2015, the withholding tax on corporate expenses paid from Greek corporate entities to, among others, tax residents of three member- states of the European Union, namely Cyprus, Bulgaria and Ireland, has been abolished.
THE PRE-EXISTING REGIME REGARDING 26% WITHHOLDING TAX ON EXPENSES IN TRANSACTIONS OF GREEK CORPORATE ENTITIES WITH CERTAIN PERSONS
On March 2015 the Greek Parliament, introduced amendments to the Greek Income Tax Code – Law 4172 of 2013 – (“the Law”), including an amendment to article 23 of the said Law regarding nondeductible business expenses.
Pursuant to the aforementioned amendment, the total expenses paid to a natural person or legal person or entity falling within one of the following categories, were not deductible:
a) Persons which at the time of issuance of the invoice or at the date of the transaction were tax residents in a non- cooperating country (as per article 65 of the Law)
b) Person which at the time of issuance of the invoice or at the date of the transaction were tax resident in a country with a preferential tax regime (as per article 65 of the Law)
c) Persons which were in fact associated companies, and had not complied, before the issuance of the invoice or the performance of the transaction with the obligations set by the Tax Procedures Code (regarding transfer pricing documentation rules)
d) Person s which did not have at the place of their registered office or at an affiliate business, the requisite organization and infrastructure in order to carry- out similar transactions as the one for which the invoice was issued, regularly and professionally.