The Cyprus Tax Department (CTD) announced the interest yields of the 10-year government bonds for a number of countries as listed below as at 31 December 2017. The interest yields of the 10-year government bonds increased by 3%, represents their "reference rate" for the purposes of granting tax allowance on new capital as per article 9B of the Income Tax Law N.118(I)/2002, as amended.

By way of background, the NID reference rate constitute the interest rate of the 10 year government bond yield of the country in which the new equity is invested or of the Republic of Cyprus (as at 31^st December of the previous tax year), whichever is the highest, increased by 3%.

NID reference rates are as follows:

*For equity invested in Austria, Czech Republic, France, Germany, Ireland, Latvia, Luxembourg, Netherlands, Norway, Slovakia, Slovenia, Spain and Sweden, the Cyprus NID Reference rate (4.881%)  is used as the minimum.

In respect of countries not mentioned in the announcement, taxpayers may apply to the CTD for the determination of the appropriate NID Reference rate enclosing the interest yields of the 10-year government bonds for the countries concerned as identified on the basis of the Bloomberg Index, or in the absence thereof, their estimation of the applicable rate.

KPMG Limited may offer further assistance in the determination of the applicable NID Reference Rates via the submission of appropriate ruling requests to the CTD.

For any further information required, please do not hesitate to contact us.