On 2015, Cyprus amended its Income Tax Law to introduce a Notional Interest Deduction on equity.

Notional interest deduction is a tax allowable deduction on corporate equity which is granted when “new equity” is used to finance most types of business assets.

The amount of notional interest deduction that is allowed for tax purposes cannot exceed 80% of taxable profit (before the deduction). In addition, if a company is in a tax loss position then no such deduction is granted.

The notional interest deduction applies to periods beginning 1 January 2015.