Malta introduces Notional Interest Deduction (NID)

By virtue of a Legal Notice No 262 of 2017 (published on 5 October 2017) Malta introduced a Notional Interest Deduction (“NID”) mechanism. The NID is a new tax incentive, which aims to approximate neutrality between debt and equity financing.

NID is an innovative way for companies to reduce their tax liabilities. It allows companies to deduct a notional interest amount based on the ‘risk capital’ of a company. Such companies will be able to claim a deduction against their chargeable income for NID deemed to be incurred on their equity capital.

Main features of NID

  • The NID will be optional for companies.
  • Calculation: notional interest rate X balance of risk capital that the undertaking has at year end.
  • Notional interest rate is defined as the ‘risk free rate’; the current yield to maturity of Malta Government stocks, with a remaining term of approximately 20 years, plus a 5% premium.
  • Risk capital is defined as: share or partnership capital of a company or partnership, any share premium, positive retained earnings, interest free loans or other debt, any other reserves resulting from a contribution to the company or partnership and any other item which is shown as equity in the financial statements of the undertaking.
  • An equivalent deduction is permitted to Maltese permanent establishment of a foreign company or partnership (resulting from a contribution to the Maltese permanent establishment).
  • NID claimed in any one year cannot exceed 90% of the company’s taxable income (before grossing up for FRFTC). Any excess can be carried forward indefinitely, to be deducted against taxable income in future years. Remaining income is taxed at the standard rate of 35%.
  • Where NID is claimed, the shareholder will be considered to receive the same amount of notional interest income, for Maltese tax purposes. If a shareholder is not resident in Malta, the deemed interest income will, however, be exempt from tax in Malta, providing that certain criteria are met.
  • Specific anti-avoidance rules are included to prevent abusive application of the regime.
  • Taxpayers will be able to claim NID on profits relating to the tax year 2017, as these profits are assessable for income tax in 2018.

For further information or assistance, please do not hesitate to contact us.

The Agreement between the Government of the Republic of Cyprus and the Government of the Republic of India on Merchant Shipping

The Agreement on Merchant Shipping between the Government of the Republic of Cyprus and the Government of the Republic of India, signed in New Delhi on 28th April 2017 (hereinafter referred to as “the Agreement”) came into force on 29th November 2017, repealing the previous Agreement on Merchant Shipping between Cyprus and India which had been signed on 11 February 1997.

The said Circular highlights some of the most important provision of the Agreement as follows:

ARTICLE 5: Either Contracting Party shall afford to vessels of the other Contracting Party the same treatment as it affords to its own vessels engaged in international voyages with regards to free access to ports, use of ports for loading and unloading of cargoes and for the embarking and disembarking of passengers, payment of dues and taxes based on tonnage or otherwise, in accordance with the national laws and regulations, exercising normal commercial operations and the use of services related to navigation.

ARTICLE 7: Each of the Contracting Parties shall recognize the identity documents issued by the competent authorities of the other Contracting Party to members of the crew who are nationals of that Contracting Party.

ARTICLE 8: During the time a vessel of the one Contracting Party is in a port of the other Contracting Party, each crew member of that vessel shall be permitted temporary shore leave in the territory of the municipality to which the port belongs, as well as in the territories of adjacent municipalities, without the requirement of a visa, provided he can show a relevant identity document as mentioned in Article 7 of the Agreement. However, such leave shall only be permitted if the master has submitted to the appropriate authorities at the port a crew list on which the names of the crew members appear, in accordance with the regulations in force in that port.

ARTICLE 10: If a vessel of the one Contracting Party is shipwrecked, runs aground, is cast ashore or suffers any other accident off the coast of the territory of the other Contracting Party, the vessel and the cargo shall enjoy in the territory of the latter Party the same benefits and privileges and accept the same liabilities as are accorded to a vessel of that Party and its cargo. The crew and passengers as well as the vessel itself and its cargo shall be granted, at any time, help and assistance to the same extent as in the case of a national vessel.

ARTICLE 11 (1): The taxation of income of any kind derived from the use of vessels in international traffic shall be regulated by the provisions of the Agreement between the Republic of Cyprus and the Republic of India for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and on Capital.

ARTICLE 11 (2): Residents of the one Contracting Party who are employed on board vessels of the other Contracting Party as masters, officers or other members of the crew should be taxed on income derived from wages or other benefits in respect of paid services rendered, only by the Contracting Party where the vessel is registered and is flying its flag.

ARTICLE 11 (3): The freight income obtained from the operation, in international traffic, of vessels of the one Contracting Party, by organisations or enterprises established in accordance with its national legislation, will be exempted from fees and taxes of any kind in the territory of the other Contracting Party

ARTICLE 11(4): Shipping organisations or enterprises of either Contracting Party shall have the right to use income and other revenue obtained in freely convertible currency within the territory of the other Contracting Party and deriving from maritime transport operations, for the purpose of making payments in the territory of that other Contracting Party. Any surpluses, after settlement of all amounts due locally, if any, are remittable abroad.

Cyprus Tonnage Tax System: Flags appearing on the Grey List and Black List of the Paris MOU for the Fiscal Year 2017

As per Circular No. 20/2017 published by the Department of Merchant Shipping on the 31st of October 2017 with regard to the Cyprus Tonnage Tax System (Law 44(I)/2010), the Director of the Department relied on sections 17(2), 27(2) and 40(2) of the Law and the relevant tables contained in the Annual report of the Paris MOU for the year 2015 and has decided that certain flags will be included in the Grey List or the Black List of the Paris MOU for the fiscal year 2017.

Specifically, ships flagged under flags of: Albania, Algeria, Azerbaijan, Bulgaria, Curacao, Egypt, Georgia, India, Jamaica, the Republic of Korea, Kuwait, Lebanon, Libya, Lithuania, Malaysia, Mongolia, Morocco, Poland, Slovakia, Switzerland, St. Vincent and the Grenadines, Syrian Arab Republic, Thailand, Tunisia, Tuvalu, Ukraine and Viet Nam are included in the GREY list of the Paris MOU. Moreover, the Qualifying non-Community ships that fall within this List shall have their annual tonnage tax increased by thirty per cent (30%),

Similarly, ships flagged under flags of: Belize, Bolivia, Cambodia, Comoros, the Republic of Congo, Dominica, Honduras, the Republic of Moldova, Montenegro, Sierra Leone, St. Kitts and Nevis, United Republic of Tanzania, Togo and Vanuatu are included in the BLACK list of the Paris MOU, accordingly. Qualifying non-Community ships that fall within this List shall have their annual tonnage tax increased by sixty per cent (60%).

In addition, Community and non-Community ships under management flying a flag of a State mentioned in the BLACK list must be deemed to comply with international and Community standards only if the technical and crew management of every such ship is entirely performed from the territory of any EU/EEA Member State. In case of failure of compliance with these requirements, s 54 of the Law will apply, thus the Director may impose a fee to ensure compliance

Overview of the Supreme Court’ s Judgment in the case Intersputnik Int. Org. of Space Communications v. Alrena Invest. Limited, handled by our Law Firm has been published in Albert Jan van den Berg (ed), Yearbook Commercial Arbitration 2017 – Volume XLII, Kluwer Law International

The overview of the Supreme Court’ s judgment in the case Cyprus No. 2017-2, Intersputnik International Organization of Space Communications v. Alrena Investments Limited, Supreme Court of Cyprus, Appeal no. 298/2013, 4 April 2017 handled by us and led by our Senior Associate Lawyer Nota Pelekanou has been published in the Albert Jan van den Berg (ed), Yearbook Commercial Arbitration 2017 – Volume XLII, Kluwer Law International, pp. 1 – 10.

The Yearbook is published annually by the International Council for Commercial Arbitration and the T.M.C. Asser Institute in The Hague and is the single most important yearly overview of international arbitration! It is available also on which is the world’s leading online resource for international arbitration research since it contains a wealth of commentary from expert authors and an extensive collection of primary and exclusive source materials, including ICC cases and awards.

Read the Summary Here

Original Decision in Greek



This year, the Monaco Yacht Show will be held from the 27th to the 30th of September.

Like each year, the MYS welcomes the world’s most extraordinary superyachts and the most respected shipyards in an exhibition which cannot be missed.

Our team shall be attending the Show from 27-29 September.

Should you have any enquiries, or wish to catch up with us during the show, please contact us at

We look forward to seeing you there!


THE CYPRUS NON-DOMICILE SCHEME – Amendment to the Law the ’60 DAYS RULE’.

In an effort to enhance the competitiveness, fairness and simplicity of the Cyprus tax system and to make it more attractive to foreign investors, the Cyprus Government passed on 9th July 2015, among others, the “Domicile” concept. The introduction of the non-domicile rules aims to attract high-earners to relocate to Cyprus, by using Cyprus as a business centre and transferring the headquarters of their business thus creating real substance.

For more information please read our English or Russian Memo.

ENG                        RUS

We are proud to announce that Corporate Live Wire Global Awards 2017 have awarded us winner of “Best in M&A Law services.”

Christodoulos G. Vassiliades & Co LLC has been awarded winner of Best in M&A Law Services by Corporate Live Wire  Global Awards 2017. The Global Awards Guide celebrates the achievements of the most successful individuals, companies and organisations over the last 12 months. The awards stem largely from industries featured in the Corporate LiveWire Expert Guides.

Global Awards

Mergers & Acquisitions are a vital part in any successful business, the team at our firm has a solid and successful track record in M&A transactions. The team has represented both buyers and sellers and provides support at all stages of an M&A transaction from bidding, through to negotiations and the closing of transactions.

With the knowledge and expertise of our firm’s lawyers, auditors, tax consultants, paralegals as well as drawing upon the services offered by our affiliated jurisdictions, we are able to bring a transaction to an effective completion.

We deal with all aspects of M&A transactions including but not limited to, corporate, antirust, tax, and employment and regulatory.

2017 has been a promising year for our firm so firm and we are confident we will continue to prosper and grow throughout the coming months.

We pride ourselves in providing excellent services to all of our clients and appreciate when our efforts are recognised.






The Merchant Shipping (Marine Equipment) Law of 2017 (Law 23(I)/2017) & The Merchant Shipping (Marine Equipment) Order of 2017 (P.I. 135/2017): Harmonisation with the European Union Directive 2014/90/EU.

As per Circular No 08/2017 issued by the Department of Merchant Shipping (DMS), on the 28th of April 2017, the Director of the MDS informed the relevant parties of the enactment of the Merchant Shipping (Marine Equipment) Law of 2017 (Law 23(I)/2017) (the “Law”) which transposes the Directive 2014/90/EU of the European Parliament and of Council of 23rd July 2014 on marine equipment into national legislation, repealing Council Directive 96/98/EC .

Main purpose of the Directive and the Law is the enhancement of the safety at sea and the prevention of marine pollution through the uniform application of the relevant international instruments which relate to marine equipment to be placed on board EU ships, and to ensure the free movement of such equipment within the Union.

Specifically, the Law applies to equipment placed or to be placed on board a Cyprus ship and for which the approval of the Competent Authority of the Republic is required by the international instruments, irrespective of whether the ship is situated in the Union at the time it is fitted with the equipment.

The new Circular also makes reference to the issuance of the Merchant Shipping (Marine Equipment) Order of 2017, P.I. 135/2017 (the “Order”) which defines the relevant international conventions coming under the scope of application of the new Law, these being:

  • the International Convention for the Safety of Life at Sea of 1974 (SOLAS 74);
  • the International Convention for the Prevention of Pollution from Ships of 1973 and the 1978 Protocol thereto (MARPOL Convention 73/78); and
  • the Convention on International Regulations for Preventing Collisions at Sea of 1972 (COLREG Convention 72).

It is noted that the international conventions include the up-to – date version of the international conventions and Protocols that have been ratified by the Republic as well as the relevant Codes in force in the Republic, which lay down specific requirements for the approval by the Competent Authority of equipment to be placed on board ships.

Further, it is highlighted that the Law repeals the previously enacted Merchant

Shipping (Marine Equipment) Laws 2002-2006 (Law 55(I)/2002 as amended). Nonetheless, the following subsidiary legislation shall continue to be in force until replacement:

  1. the Merchant Shipping (Marine Equipment) Order of 2016 (P.I. 92/2016)∙
  2. the Merchant Shipping (Marine Equipment) Notification of 2016 (P.I. 91/2016).

Legal 500 – 2017 Ranking

Our Law Firm continues strengthening its positions in the international legal rankings directory The Legal 500: Europe, Middle East & Africa.

First and foremost, we are proud to be recommended as the Leading Law Firm 2017.


Furthermore, this year we are recommended in 5 practice areas:

  • Commercial, corporate and M&A
  • Dispute resolution
  • Intellectual property
  • Maritime and admiralty
  • Real estate and construction

We are proud to announce that our Maritime and Admiralty department received Tier 1 recognition. We are noted as being a ‘thorough and experienced’ team.

Our Commercial, Corporate and M&A team has been characterized as a ‘‘fast team [which] produces work of excellent quality in a cost-effective way’.[…] The ‘outstandingChristodoulos Vassiliades, the ‘exceptionalKoulla Demetriou and the ‘knowledgeableMichalis Pittakis are recommended.’’

Our Dispute Resolution Department was also recognized for its work.

For Intellectual Property, our firm is distinguished as a ‘responsive and helpful team’.

We are also very proud that 6 of our lawyers are recommended for their excellence, namely:

  • in relation to our main area of practice, Commercial, Corporate and M&A, our Managing Partner Christodoulos G. Vassiliades and Deputy Managing Director Koulla Demetriou were recommended as well as Michalis Pittakis, Head of Corporate Department, was proclaimed as a Legal 500 Next Generation Lawyer;
  • for Dispute Resolution Christodoulos Clerides is recommended as the considered key figure.
  • for Maritime and Admiralty Maria Hadjivarnava; and
  • Savvas Georgiou in relation to Real Estate and Construction.

We shall stay committed on continually improving the quality of the advice and service we offer our clients.

For a complete view of our profile:


On February 2nd 2017, Christodoulos G. Vassiliades & CO. LLC attended the event “Shipping: An Industry of Passion, Knowledge and Experience-Part Two”.

The event was held at The Poseidonia Hotel in Limassol, it was organised by Maravilhosa group and our firm was one of the supporting sponsors.

The panel comprised of six speakers from various areas of the shipping industry, all of whom are key players in the industry and each one, according to his experience, contributing to the successful conduct of the event.

The panel comprised of six key players, all derived from various areas of the shipping industry. Their experience and contribution at the event undoubtedly lead to its success.

Ms. Muriel Matta, a moderator of the event and founder of Maravilhosa, introduced the panelists and went on to talk about the role of culture and leadership in the international industry of shipping.

Mr. Craig Eason, a journalist of the Panel, described his experience as a Seafarer and how he found himself with a career in journalism. He urged the young audience he stood before, to learn about Shipping and encouraged them to gain onboard vessel experience.

Captain Eberhard Koch, having served in leadership positions both at sea and ashore, gave a vivid description of the onboard working conditions. He prompted that young people, discover the shipping industry whilst making extensive reference to the Cyprus Maritime Academy.

Ms. Despina Panayiotou-Theodosiou, spoke of the maritime environment from a woman’s perspective. As the founding President of WISTA Cyprus, she highlighted the dynamic participation of women in the maritime workforce and its positive effects thereby. Her speech focused on the importance of education as well as development and how these two factors are affected by the Shipping Associations.

Mr. Dimitris Fokas, as a Naval Architect and Marine Engineer, discussed the topic from a more technical aspect. He pointed out that, during his long career in Shipping he had met successful, female seafarers, in positions that had been traditionally held by men.

Mr. Papaminas, a student in Shipping Commerce and Finance, made an enthusiastic presentation of his aspirations in the industry and presented his perception about the opportunities raised in shipping and the passion created when involving in maritime affairs.

Mr. Andreas Chrysostomou, the ex- Director of the Department of Merchant Shipping, who is actively involved in all fields of International Shipping and who has previously been awarded and recognised internationally, encouraged the industry beginners to work in shipping passionately. He also encouraged women to feel equally and join the industry.

Overall, the event was interesting and effective; covering diverse areas of shipping from experienced and freshly entered professionals. The main points highlighted, is that shipping is not addressed only to men but also to women who are equally encouraged to join both at sea or ashore.

Although it is competitive, shipping is a profitable and strong industrial sector which is highly recommended to the young generation.

The attendants participated actively and joyfully. Many young people in the conference took the chance to express their concerns of the industry and whether it can indeed, absorb beginners, given the existent competitiveness and the insecurity created by the global financial crisis. The ambiance was not that of a typical strict seminar but that of a warm, amicable conversation between present and future members of the shipping society and it was enjoyable to watch students engaging and expressing their interest and enthusiasm about shipping.

The event was concluded by a networking cocktail reception during which the audience had the opportunity to enjoy a relaxing and friendly discussion with the panelists.

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