Sixty years of KPMG in Cyprus

KPMG’s offices in individual countries operate in coordination and in compliance with KPMG’s international values, quality standards and services. At the same time, the relative independence allowed by KPMG International enables the individual countries’ offices to develop a strong local presence, using both their local market knowledge and KPMG’s know-how and international information resources.

KPMG in Cyprus trace their origins back in 1948 and are today one of the largest and most reputable audit and advisory firms in the Cyprus market.

In today’s ever-changing business environment, there is a need for professional business advisors, who are not only able to think outside the box, but also have the commitment and desire to serve each client as an individual. 

“At KPMG our guiding philosophy is to provide our clients with the highest-quality service. Through the high academic and professional qualifications and experience of the people here at KPMG, our Firm can deliver value-adding solutions for demanding and complex projects.”

Lines of services
KPMG specialises in three major fields, each of which includes a wide range of specialised sub-services, aiming at providing its clients with the service that best suits their individual needs.
These three areas are:
• Audit
• Tax
• Advisory

For each of these core functions, KPMG has specialised departments with high-calibre professionals, headed by partners with vast experience.

Tax services
One of KPMG’s fastest-growing departments is the one focusing on tax, both local and international. The tax department of KPMG in Cyprus provides full tax support and compliance services, as well as tax planning and advisory services to a significant number of local and multinational companies. KPMG’s tax department comprises of a team of proficient tax advisors who are highly experienced in the field of local and international tax as
well as accounting issues.

Among the core functions of KPMG’s tax advisory department is the provision of specialised tax opinions in the following fields:
• Corporate and Personal Taxation
• International Executive Services (IES)
• Value Added Tax (VAT)
• Capital Gains Tax (CGT)
• Stamp Duty Tax

Tax compliance services
Corporate taxation
Corporate tax compliance services relate to the interpretation of current tax laws and regulations stemming from Cyprus’ accession to the European Union. The necessity for updating and educating the local business community, in conjunction with the globalisation of the markets, dictates the accurate and timely update on the current tax developments. KPMG has created an open line of communication with its clients which ensures an immediate response to their questions and needs.

Preparation of tax returns
In the course of KPMG’s tax compliance services, the tax department undertakes the preparation and submission of corporate and personal tax returns, Special Contribution for the Defence calculations, Capital Gains computations, VAT returns, PAYE matters, as well as Immovable Property issues.

Due diligence
Through due diligence services, KPMG provides reports that address the detection and correction of issues that are inconsistent with the tax legislation. KPMG provides alternative solutions to the business’s management and advice on the possible tax implications that may arise from each course of action.

Tax and social insurance
The need for the structuring of a healthy company, a result of the detailed specification of the employer’s obligations towards the employee, requires the compliance of the company with the Pay As You Earn (PAYE) system as well as full compliance with the Social Insurance legislation. Equally necessary is the decrease of the employer’s expenses arising from keeping and operating a correctly structured payroll. A correct and balanced payroll and pension plan, including salaries, long-term benefits, rights and bonuses will benefit both the employer and the employee the most. KPMG provides services to companies and individuals in relation to the tax management of expenses and income, the correct withholding and remittance of PAYE and social insurance contributions as well as the structuring of the most tax-beneficial retirement plan.

Tax services to staff seconded in Cyprus
The development of multinational businesses raises the need for international staff secondment, mainly directors who take on important positions in the foreign subsidiary companies of the business. From the international staff secondments, several practical issues of tax nature arise, concerning mainly the planning before the departure of the employee, the systems which will support the transfer management and the planning for the employee returning to the country of origin or his secondment to the new destination.
   
KPMG provides the following services and the relevant support to the company as well as to the seconded individuals:
• Support in the settlement of foreign citizens in Cyprus, including issues relating to the Social Insurance Legislation
• Support for the settlement of Cypriot citizens in a foreign country
• Provision of tax advice at the arrival of employees as well as during their departure from Cyprus
• Preparation and submission of tax returns
• Advice on tax planning opportunities and the provision of written tax opinions
• Provision of tax advisory services regarding income and capital gains tax, issues of private pension tax and life insurances.

Tax advisory services
International corporate taxation
The rapid growth of cross-border investments, combined with the very beneficial Cyprus tax regime, resulted in the wide development of the island as a reputable financial centre for many multinational companies. As a result, the need for a detailed study on the tax consequences of cross-border investments coupled with the need for constant monitoring and evaluation of such investment plans is nowadays imperative.

KPMG provides the following tax advisory services:
• Thorough examination of the tax consequences in relation to inbound and outbound investments
• Tax planning regarding the implementation of efficient tax structures through Cyprus
• Tax planning regarding exit strategies and efficient repatriation of profits
• Analysis of the tax implications resulting from intra-group cross-border capital movement as well as from the cross-border charge and/ or fees collection, tax rights and dividends in view of bilateral conventions and the European Tax Law.

Transfer pricing
Although there are no transfer pricing rules in Cyprus, the arm’s-length principle has been incorporated in the Cyprus Tax Law. The tax laws of Cyprus have incorporated the OECD model and guidelines to determine the term ‘arm’s-length’.

The adherence to the arm’s-length principle is crucial to the movement of capital between related entities of the same group. The tax authorities’ focus on such transactions has increased dramatically in the last few years and adherence to the arm’s-length principles is now closely monitored.

KPMG, with many years of experience on complex international and cross border transactions can provide the following services:

• Planning the implementation of transactions between related companies
• Compliance with Transfer Pricing principles and preparation of the relevant documentation
• Review of agreements and other relevant documentation for ensuring compliance with Transfer Pricing principles.

KPMG in Cyprus is in a position to meet a company’s every∞day needs in matters of international and local tax planning, cross-border mergers and acquisitions as well as advice on various tax issues that a company may come across during its day-to-day operations.

KPMG always provides these services with a standard of excellence, by efficiently applying the principles of our local tax system in the most optimal way, as well as by seizing the tax opportunities presented by the European acquis.