NicosiaNicosiaLimassol Mon - Fri 08:00-18:00 +357 22 261 777 Mon - Fri 09:00-18:00 +357 25 261 777
info@vrikislegal.com

Cyprus – Overview of Stamp Duty Provisions

1. Law and Applicability

Under Cyprus Law, stamp duty is governed by Stamp Duty Law (19/1963), as amended from time to time (the “Law”). The Stamp Duty Law, under Article.4 (1) therein, provides that the documents specifically named in its first schedule of the Law are subject to stamp duty if the documents:

  1. concern property situated in the Republic of Cyprus, or
  2. concern matters or things to be performed or done in Cyprus, irrespective of the place of execution of such documents.

It must be noted that several categories of documents/agreement are explicitly exempted from stamp duty, including documents relating to the sale of goods, hiring of employees, transfer of securities quoted on a recognized stock exchange, and so forth.

2. Timeframe for Payment

Payment of the Stamp Duty imposed under the Law on a document/agreement is effected by way of payment at the district Stamp Duty commissioner (a department which is part of the Income Tax office).

A document can be stamped:

  • On the date or before the signing of that document; or
  • Within 30 days from the date the document was signed.

Stamping is possible even after the expiry of 30 days, however penalties shall be applicable in such an event. The penalties are provided under Article 20 of the Law, as follows:

a) If the amount of the stamp duty is paid within six months after execution:

  • If the amount of stamp duty which remains unpaid does not exceed €2,00, then the unpaid amount must be paid plus an additional sum of €2,00.
  • If the amount of the unpaid stamp duty exceeds the amount of €2,00 but it is less than the amount of €35,00, then the unpaid amount is payable, plus a penalty equal to the unpaid amount.
  • If the unpaid stamp duty exceeds €35,00, then the amount unpaid is payable plus €35,00 and additional penalty of €0,10 for each €1,00 (or part of € 1,00) of the amount which exceeds €35,00.
  • If the amount of the stamp duty is paid after the expiration of six months from execution, the amount of the unpaid stamp duty is payable, plus double the amounts referred to under (a) above as penalties.

3. Effect of Non-Payment of Stamp Duty

Documents that are subject to stamp duty cannot, with the exception of Criminal Proceedings, be accepted as admissible evidence in Court, unless such documents are duly stamped (Article 36 of the Law).

Parties may still elect to proceed with stamping the document which is required to be used in Court as evidence, even if several years have passed since its execution; however, the penalties mentioned above, shall need to be fully paid.

4. Applicable Rates for Stamp Duty

The applicable rate for the Stamp Duty is provided in Appendix 1 of the Law, covering specific agreements and documents. By way of example, a Power of Attorney which authorizes one person to undertake a specific action, should bear a stamp duty of  €2,00; but in the case of any other form of Power of Attorney, the Stamp Duty payable should be €6,00.

Where no specific provisions are made in Appendix 1 of the Law, the document/agreement should bear stamp duty which is calculated in the following manner:

  • Agreements valued between €1- €5.000 bear a Stamp Duty of zero (0).
  • For Agreements valued between €5.001-170.000, for every €1000 or part of €1000 the value of stamp duty is €1.50.
  • For Agreements valued over €170.000, for every €1000 or part of €1000 the value of stamp duty is €2 with maximum amount of stamp duty €20.000

5. Examples for commonly used Documents/Agreements

  • Loan Agreements which are executed in Cyprus

If the funds to be advanced under a loan agreement, which is executed in Cyprus, are (a) not utilised in Cyprus and (b) the loan is repaid from funds located outside Cyprus, then the loan agreement is not required to be stamped in Cyprus.

However, if any of the above is not applicable, you will have a case where either there is concerned property in Cyprus and/or there is an action to be done in Cyprus, thus triggering the provisions of the Law and requiring payment of the Stamp Duty.

  • Instrument of Transfer of Shares

Where the Instrument concerns the transfer of shares in a Cyprus Company, and the instrument is executed in Cyprus, the document is not subject to Stamp Duty.

  • Agreement for the Purchase of Shares
  1. Where the agreement concerns the purchase of shares in a Cyprus Company, and the agreement is executed in Cyprus, the document is not subject to Stamp Duty.
  2. Where the agreement concerns the purchase of shares in a Foreign Company, and the agreement is executed in Cyprus, the document is not subject to Stamp Duty.
  • Pledge of Shares of a Cyprus Company

As there is a positive obligation under our Contract Law and Companies Law for such Pledge Agreements to be duly stamped in order to create a valid pledge, such an Agreement would require the payment of the Stamp Duty. The amount to be paid is to be calculated in accordance with the value which the pledge secures.

View as PDF