Focus CYPRUS MARKET REPORT
location, network of double tax treaties, membership in the EU and stable economy, means the island is an ideal place to locate holding, trading and intermediary companies. Its taxation regime doesn’t stand out particularly among its offshore competitors but changes to tax legislation in 2002 gave the Republic of Cyprus the lowest rate of corporate tax in the EU at 10 per cent which applies to both onshore and offshore companies.
There are of course no physical casinos located in the Republic of Cyprus but gamblers exploited a legal loophole which resulted in online gambling via overseas providers going virtually unregulated. In 2004 a UK law firm began to work with the Cypriot government on a new internet gambling legislative framework which was started when it was revealed the government was losing around €30m per year in revenue due to untaxed gaming activities. A bill was submitted to parliament in 2006 and rejected. A year later the government imposed stricter standards and two laws were amended - the Collective Bets (Regulation and Taxes) Law and Horseracing Bets and Lotteries Tax Law of 2007. These saw a reduced taxation on collective bets to 10 per cent tax on net turnover and a focus on underage gambling. However it did not regulate online gaming.
Lawyer Olga Georgiades is Director of Lexact Solutions LTd, a company formed for the purpose of providing practical seminars for professionals on legal and tax issues. She said: “Since 2006 a number of draft bills have been prepared by the government and presented to the House of Representatives attempting to ban nearly all forms of online gambling in the Republic of Cyprus. Until 2010 it has been unsuccessful in its efforts because the draft bills were blocked by the European Commission following a complaint filed by Magneta Technologies, a Cypriot gaming software developer. “This complaint caused the European Commission’s interference due to the fact that the bill was considered to constitute a restriction on the freedom of establishment and the freedom to provide services.”
However the current situation is now offering a sort of online gambling free for-all. It is estimated that 95 per cent of electronic gambling services are currently operated illegally because they are provided over the internet. At the moment around 400 locations around the south of the island currently provide the means for online gaming under a ‘quasi-legal status’ owing to the absence of legislation. If the authorities raid a
location and seize equipment the operators merely replace the computers and are back in business the following day.
Online gambling in the Republic of Cyprus currently has an estimated turnover of around €2.5bn per year yielding a gross profit of €400m. By 2012 this turnover is expected to be as high as €5bn with a gross profit of nearly €1bn.
If the ban goes ahead online gaming operators would need to relocate from the Republic of Cyprus thus taking away jobs and income and some fear the negative consequences this will have on the economy. Reports suggest the
pro curve the industry's first curved LCD display
Cyprus’ taxation regime doesn’t stand out
particularly among its offshore
competitors but changes to tax
legislation in 2002 gave Cyprus the lowest rate of
corporate tax in the EU at 10 per cent which applies to
both onshore and offshore
companies.
government has already initiated action against online gaming companies that are currently operating from Cyprus. These companies had opted for Cyprus because it was convenient and tax- efficient. Now the Inland Revenue could be investigating and because of the inefficiencies in the tax department many companies in Cyprus, including online gaming companies, get away with tax evasion.
The Cypriot government however now want to amend the law again and delete online gambling from the permissible betting services from this year and enable them to deal with unlicensed and illegal online gambling sites.
Your
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92