MONDAY, 21 SEP 2020

 

CONNECT

Facebook Linked In Twitter
Compliance_29/01-24/09_728x90px
GloriaJeans_266x90px
IMH LTD

Katerina Sakellaropoulou: Greece And Cyprus Have Single, Firm Diplomatic Front

Christodoulides: Turkey Chooses Further Escalation In The Case Of Cyprus

IMH LTD

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

Unexplained Wealth Orders “From A to B & Back Again”

On 8 April 2020, the National Crime Agency (NCA) had an Unexplained Wealth Order (UWO) ...

FROM AROUND GOLDNEWS

   

Katerina Sakellaropoulou: Greece And Cyprus Have Single, Firm Diplomatic Front

Greece and Cyprus have a single and firm diplomatic front which is always driven by the common and national interest and is based on international law, ...
   

Infocredit Group Proudly Supports The 6th International Compliance Forum

Infocredit Group holds a spot amongst the proud sponsors of the 6th International Compliance Forum which will run digitally on 24-25 September 2020. The event ...
   

Emirates Announces Collaboration With Huawei To Promote Emirates App

Emirates has announced a collaboration with Huawei, one of the world’s top smartphone brands, to promote the Emirates app to Huawei phone users and build ...
   

Christodoulides: Turkey Chooses Further Escalation In The Case Of Cyprus

Foreign Minister of Cyprus Nikos Christodoulides says that Turkey chooses to further escalate tension in the case of Cyprus. In an interview with Greek website ...
   

Cyprus’ Sovereign Ratings Affirmed, Outlook Remains Stable

Capital Intelligence Ratings (CI Ratings or CI) today announced that it has affirmed the Republic of Cyprus’ Long-Term Foreign Currency Rating (LT FCR) ...
   

EU Commission Raises Climate Ambition And Proposes 55% Cut In Emissions By 2030

The European Commission presented its plan to reduce EU greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels. This level of ambition ...
   

Sunnyseeker Hotels Takes Over Elias Beach Hotel In Limassol

Sunnyseeker Hotels announced the signing of a management agreement with EOE Tourist Enterprise Ltd, owner of the Elias Beach Hotel in Limassol. ...
   

Nicos Anastasiades: Mitigating The Pandemic’s Social And Economic Impact Remains Our Main Concern

Mitigating the social and economic impact of the coronavirus pandemic and the return of all sectors of the economy to maximum operation remain the ...
 

YOUR COMMENTS

HEADLINES

MOST POPULAR

Global_Investments_Outlook_05/08-05/10
Phoenix_Leaders_10/09-21/09_300x250

IMH LTD