NOTIONAL INTEREST DEDUCTION
Debt has been traditionally used as a tax efficient way to finance business operations mainly through back to back debt agreements. However, recent tax developments at international level are such that back to back debt may prove to be risky and should be avoided.
In response to the tax developments, Cyprus has introduced a new incentive that enables companies to finance their operation through equity at a tax efficient way.
For more information please see the Notional Interest Deduction