2020 Cyprus Reference Rates for Notional Interest Deduction

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The Cyprus Tax Department announced on 12 February 2020 the interest rates of the 10-year government bonds for a number of countries as at 31 December 2019. These rates, when increased by 5%, will be used as reference rates for calculating Notional Interest Deduction (NID) for the year 2020.

The application of NID is governed by Article 9B of the Income Tax Law of 2002 as amended, which provides for a notional interest deduction for tax purposes on new equity capital injected into Cyprus resident companies (or permanent establishments of foreign companies in Cyprus) as from 1 January 2015, provided the new equity funds are used for business purposes.

The reference rate for year 2020 is equal to the 10-year government bond yield as at 31 December 2019 of the country in which these funds have been applied, increased by 5%. When applied as per the relevant provisions, the NID reference rate results in a notional interest expense that can reduce the relevant taxable profit. More on NID can be found on our related detailed information sheet by clicking here.

The 2020 reference rates that have been announced by the Cyprus Tax Department are set out on the table below.

Click for NID reference rates of previous years: 2017, 2018, 2019.

 

  Country

  10-year Bond Yield (as at 31/12/2019)

  2020 NID Reference Rate

  Cyprus

  0.536%

  5.536%

  Abu Dhabi

  2.514%

  7.514%

  Argentina

  10.253%

  15.253%

  Armenia

  8.064%

  13.064%

   Austria

  0.016%

  5.016%

  Belarus (expressed in USD)

  5.350%

  10.350%

  Belgium

  0.086%

  5.086%

  British Virgin Islands

  N/A

  N/A

  Bulgaria

  0.257%

  5.257%

  Canada

  1.699%

  6.699%

  Cayman Islands

  N/A

  N/A

  China

  3.130%

  8.130%

  Croatia

  0.621%

  5.621%

  Czech Republic

  1.569%

  6.569%

  Dubai

  N/A

  N/A

  Dubai (expressed in USD)

  3.160%

  8.160%

  Egypt

  13.518%

  18.518%

  Egypt (expressed in USD)

  6.382%

  11.382%

  Finland

  0.043%

  5.043%

  France

  0.115%

  5.115%

  Germany

  (0.210%)

  4.790%

  Greece

  1.431%

  6.431%

  Hong Kong

  1.699%

  6.699%

  Hungary

  2.017%

  7.017%

  India

  6.557%

  11.557%

  Ireland

  0.120%

  5.120%

  Isle of Man

  1.712%

  6.712%

  Israel

  0.960%

  5.960%

  Israel (expressed in USD)

  2.520%

  7.520%

  Italy

  1.404%

  6.404%

  Ivory Cost

  N/A

  N/A

  Kazakhstan

  0.996%

  5.996%

  Kazakhstan (expressed in USD)

  2.566%

  7.566%

  Kenya

  12.180%

  17.180%

  Latvia

  0.136%

  5.136%

  Lithuania

  0.169%

  5.169%

  Luxembourg

  (0.087%)

  4.913%

  Morocco

  2.420%

  7.420%

  Mauritius

  4.260%

  9.260%

  Netherlands

  (0.060%)

  4.940%

  Nigeria

  N/A

  N/A

  Nigeria (expressed in USD)

  11.563%

  16.563%

  Norway

  1.540%

  6.540%

  Poland

  2.109%

  7.109%

  Romania

  4.398%

  9.398%

  Russia

  6.270%

  11.270%

  Russia (expressed in USD)

  2.605%

  7.605%

  Saudi Arabia

  2.839%

  7.839%

  Serbia

  2.778%

 7.778%

  Singapore

  1.730%

  6.730%

  Slovakia

  0.192%

  5.192%

  Slovenia

  0.267%

  5.267%

  South Africa

  9.018%

  14.018%

  Spain

  0.463%

  5.463%

  Sweden

  0.145%

  5.145%

  Switzerland

  (0.454%)

  4.546%

  Taiwan

  0.670%

  5.670%

  Ukraine

  N/A

  N/A

  Ukraine (expressed in USD)

  6.504%

  11.504%

  United Arab Emirates

  N/A

  N/A

  United Kingdom

  0.817%

  5.817%

  United States

  1.919%

  6.919%

  Vietnam

  3.459%

  8.459%

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