The Cypriot Tax Department, on the 3rd of February, 2022, issued an announcement that included a ten-year government bond yield rate as of 31st of December, 2021 for various countries (included on the table mentioned below) with regards to the Notional Interest Deduction (NID) on equity. In order to determine the reference interest rate for the purpose of claiming NID for the 2022 tax year, these yield rates are required to be utilized.

Below is a summary of the key NID provisions along with the applicability of the 10-year government bond yield rates.

Detailed discussion

Notional Interest Deduction

As of 1st of January 2015, Cyprus tax resident companies along with those foreign companies that have a permanent establishment in Cyprus, which further carry on or involve a business, are legally allowed to claim a NID on their equity capital which has been introduced on or after the 1st of January, 2015.

The NID is subtracted from the company's taxable income for the particular relevant year (depending on any restrictions) for the time period during which the company utilizes the equity for the purpose of continuing with its activities. The NID is dependent on various conditions, which may include a taxable income limitation as well.

The NID certainly equals the multiple of the “new equity” and the “reference interest rate” (as explained below).

 When we talk about “Reference interest rate”, it means the ten-year government bond yield as of

31st of December of the previous year of the country's tax year in which the investment of new equity is made which is increased by around 5%. Ten-year government bond yield rates as of 31st of December 2021 (applicable for the tax year for 2022)

Country   Yield rate   Country  Yield Rate
 Abu Dhabi  N/A*  Italy  1.170
 Albania  N/A*  Ivory Coast  N/A*
 Argentina  3.508  Jordan (US$)   5.631
 Armenia  9.722  Kazakhstan (€)  1.444
 Australia  1.670  Kazakhstan (US$)  2.107
 Austria  0.072  Kenya  12.660
 Azerbaijan  N/A*  Latvia  0.323
 Belarus (US$)  9.785  Lebanon  N/A*
 Belgium   0.180   Lithuania   0.259
 Bermuda (US$)  2.376   Luxembourg   0.129
 British Virgin Islands  N/A*   Morocco   2.239
 Bulgaria    0.690  Mauritius   4.200
 Canada   1.479   Netherlands   0.035
 Cayman Islands   N/A*   Nigeria   12.607
 Chile   5.652   Nigeria (€)   N/A*
Chile (US$)  2.560  Norway  1.699
Chile (€)  0.834  Poland  3.646
China  2.775 Portugal  0.462
Costa Rica 6.363 Romania  5.146
Croatia  0.560  Russia  8.390
Cyprus  0.629   Russia (US$) 1.994
Czech Republic  2.797  Saudi Arabia  2.932
Denmark  0.061  Serbia  4.126
Dubai (€) N/A*  Singapore 1.638
Dubai (US$)  2.533  Slovakia  -0.083
Egypt  14.913  Slovenia 0.349
Egypt (US$)  7.570  South Africa  9.799
Estonia  0.122  Spain  0.563
Finland  0.082  Sweden  0.220
France  0.195  Switzerland  -0.153
Germany   -0.206 Taiwan  0.700
Guernsey  N/A*  United States  1.512
Greece 1.315   Ukraine (€) N/A*
Hong Kong   1.524 Ukraine (US$)  8.902
Hungary  4.484  United Arab Emirates  N/A*
India  6.509  United Kingdom  1.020
Ireland  0.237 Isle of Man  1.502









* There are currently no government bond yield rates for the above indicated countries.


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