2021 Cyprus Reference Rates for Notional Interest Deduction

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The Cyprus Tax Office announced the 10-year government bond yield rates for a number of countries as at 31 December 2020. These rates, when increased by 5%, can be used as reference rates for calculating Notional Interest Deduction (NID) for the year 2021. 


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.
In brief, the reference rate for year 2021 is equal to the 10-year government bond yield as at 31 December 2020 of the country in which the new equity has 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. The NID is restricted to 80% of taxable profits generated by the application of the new equity.


More on NID can be found on our related detailed information sheet by clicking here.


The 2021 reference rates that have been announced by the Cyprus Tax Office are set out on the table below.
Click for NID reference rates of previous years: 2017, 2018, 2019, 2020.

 

  Country

  10-year Bond Yield (as at 31/12/2020)

  2021 NID Reference Rate

  Cyprus

  0.136%

  5.136%

  Abu Dhabi

  16.81%

  6.681%

  Albania

  N/A

  N/A

  Argentina

  3.269%

  8.269%

  Armenia

  7.485%

  12.485%

   Australia

  1.005%

  6.005%

   Austria

  -0.433%

  4.56%

  Azerbijan

  N/A

  N/A

  Belarus (expressed in USD)

  6.075%

  11.075%

  Belgium

  -0.388%

  4.612%

  British Virgin Islands

  N/A

  N/A

  Bulgaria

  0.19%

  5.19%

  Canada

  0.675%

  5.674%

  Cayman Islands

  N/A

  N/A

  China

  3.18%

  8.18%

  Croatia

  0.548%

  5.548%

  Czech Republic

  1.252%

  6.252%

  Denmark

  -0.459%

  4.541%

  Dubai

  N/A

  N/A

  Dubai (expressed in USD)

  2.594%

  7.594%

  Egypt

  14.006%

  19.006%

  Egypt (expressed in USD)

  6.678%

  11.678%

  Estonia

  -0.211%

  4.789%

  Finland

  -0.425%

  4.575%

  France

  -0.343%

  4.567%

  Germany

  -0.388%

  4.612%

  Greece

  0.19%

  5.19%

  Hong Kong

  0.541%

  5.541%

  Hungary

  2.135%

  7.135%

  India

  5.865%

  10.865%

  Ireland

  -0.318%

  4.682%

  Isle of Man

  0.985%

  5.985%

  Israel

  0.77%

  5.77%

  Israel (expressed in USD)

  1.551%

  6.551%

  Italy

  0.541%

  5.541%

  Ivory Cost

  N/A

  N/A

  Jordan (expressed in USD)

  4.48%

  9.48%

  Kazakhstan

  0.653%

  5.653%

  Kazakhstan (expressed in USD)

  4.03%

  9.03%

  Kenya

  11.977%

  16.977%

  Latvia

  -0.18%

  4.82%

  Lebanon

  N/A

  N/A

  Lithuania

  -0.197%

  4.803%

  Luxembourg

  -0.415

  4.585%

  Morocco

  2.403%

  7.403%

  Mauritius

  1.58%

  6.58%

  Netherlands

  -049%

  4.51%

  Nigeria

  7.261%

  12.261%

  Norway

  0.944%

  5.944%

  Poland

  1.229%

  6.229%

  Romania

  2.959%

  7.959%

  Russia

  5.91%

  10.91%

  Russia (expressed in USD)

  1.546%

  6.546%

  Saudi Arabia

  2.399%

  7.399%

  Serbia

  3.48%

 8.48%

  Singapore

  0.834%

  5.834%

  Slovakia

  -0.52%

  4.48%

  Slovenia

  -0.187%

  4.813%

  South Africa

  8.736%

  13.736%

  Spain

  0.043%

  5.043%

  Sweden

  0.022%

  5.022%

  Switzerland

  -0.523%

  4.477%

  Taiwan

  0.3%

  5.3%

  Ukraine

  N/A

  N/A

  Ukraine (expressed in USD)

  6.052%

  11.052%

  United Arab Emirates

  N/A

  N/A

  United Kingdom

  0.192%

  5.192%

  United States

  0.916%

  5.916%

  Vietnam

  2.202%

  7.202%

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