SATURDAY, 6 JUN 2020

 

CONNECT

Facebook Linked In Twitter
GAP_Group_2019_728x90px
GloriaJeans_266x90px
IMH LTD

Zeta Emilianidou Outlines Measures To Support Employment, Workers And Vulnerable Groups

Cyprus Government: €700 Mn To Counteract Coronavirus Repercussions

IMH LTD
GAP_Group_2019_468x60px

OPINION

Ambiguities and Concerns in the Implementation of the Informative Brochure and Explanatory Circular for Benefits in Kind

Ambiguities and Concerns in the Implementation of the Informative Brochure and Explanatory Circular for Benefits in Kind

In line with an international trend that has been gaining ground over recent years, many Cypriot companies are now offering a wide range of Benefits in Kind (use of company and private vehicles, employee stock purchase plans, use of company assets, meals, gifts, relocation expenses, trips, etc.), mainly aiming to attract specially trained and specialised staff, as well as satisfy their various financial and labour needs.

The Tax Department issued an Informative Guide on Benefits in Kind in October 2018, which aims to help physical and legal persons handle such benefits, through simplified procedures. Six months after the guidelines in the Informative Guide came into effect, it is apparent that there are aspects that need to be further clarified or even changed, so as to achieve the initial target of the Tax Department.  

Specifically, as it comes to the first category, which concerns Benefits in Kind relating to cars, there is an issue with defining the value of used cars, since the calculation method implemented by the Tax Department is time-consuming as well as complicates the entire procedure.

Moreover, there is another important matter, in the same category of Benefits in Kind: the calculation of the rate for the private use of a car. The definition given for the distance between the two points where a reduced rate applies, is put forward also in cases where normal rates apply. This causes confusion as it comes to identifying which cases allow for a reduced rate.

Furthermore, in the Benefits in Kind category (general provisions besides cars and assets), many questions are raised with regards to the interpretation as well as the implementation of the relevant directives, in terms of identifying the Benefit in Kind based on the directives of the Tax Department. Specifically, problems have emerged in relation to the following:

  • Covering the costs for a business trip as well as providing a €250 daily allowance.
  • A holiday home that belongs to the employer and is not offered for rent but is available for the employees.
  • Gifts to employees (awards related to performance)

The above examples point to the conclusion that in the period between the issuance and implementation of the Informative Guide – even after the seminar that was held with the Taxation Commissioner as the main speaker, who explained the content of the guide and the Explanatory Circular, which was based on the questions of the participants of the seminar – there haven’t been any official guidelines that provide specific answers to all the points that were raised.

The Tax Department has merely given out general guidelines, with a general form of taxation in mind, without considering fields such as the accommodation, insurance and welfare of people receiving Benefits in Kind. As such, the department should issue more general clarifications, crucial for the smooth implementation of the principles laid down by the Tax Department. A framework which takes into account the social impact of taxation and not only serves and applies a general/wide tax base.

*Head of People Advisory, Corporate Immigration and Payroll Services at Ellinas Finance Public Company.

MORE ON OPINION

Quantum Computing: A Glimpse Of Tomorrow’s Technology

Quantum computing is one of the most promising research topics of the new decade. ...

Technology is Transforming the Mining Industry

The global mining industry has radically evolved over the last 25 years, largely due to ...

FROM AROUND GOLDNEWS

   

Optimising Productivity After Resuming Construction Works At Pafilia

Pafilia Property Developers has resumed construction work on all of its projects following the government's opening of construction sites. Despite the new ...
   

Minthis Restaurant Reopened To The Public

The Restaurant at Minthis reopened to the public from Monday, June 1. The restaurant is within the contemporary Clubhouse at the Aphrodite Hills resort, ...
   

SAP Business ByDesign: A Time-Tested Solution for Fast-Growing Businesses in Cyprus

A business does not have to be big, to be ‘smart’ - regardless of  size, type and sector, every business can utilize ‘smart’ ...
   

Consulco: Ranked as a Top Tier Performer in London Real Estate by Morgan Stanley

Following the recent assessment by Morgan Stanley Capital International, Consulco ranked 15th amongst the 160 competitors that specialise in retail ...
   

Insignia Launches First Ever Clean Payment Card

Perhaps the most unavoidable form of germ transmission occurs through the ordinary use of money and credit cards. Despite the increase in electronic ...
   

A New Global Methodology To Define Cities And Rural Areas

Have you ever asked yourself how Sustainable Development Goal indicators on sustainable cities and communities can be compared if countries across the world ...
   

Cyprus Government: €700 Mn To Counteract Coronavirus Repercussions

Cyprus announced a financial support package of € 700m, equivalent to 3% of the GDP which includes a series of measures, covering health, finance and ...
   

Zeta Emilianidou Outlines Measures To Support Employment, Workers And Vulnerable Groups

Measures to support employment, workers and vulnerable groups of the population  from the effects of the coronavirus protection measures, which are ...
 

YOUR COMMENTS

HEADLINES

MOST POPULAR

Limassol_Business_Summit_10/03-23/06_300x250px
Gold_Digital_Edition_300x250px

IMH LTD