As we did write in our post regarding Cyprus tax, corporate entities, under certain circumstances, can deduct a hypothetical interest on the paid-up capital of the company. This deduction lowers the taxable profit of the company. The interest is calculated either on the yield of the 10-year government bond of Cyprus or on the similar bond of the country where the money is invested in (whichever is higher), plus 3%. The interest rates to be used are of December 31 of the preceding year.
Here is a list of the interest rates bo be used in 2019:
| 10-year bond rate |
Reference rate for 2019 |
|
| Armenia | 6.385% | 9.385% |
| Austria | 0.484% | 5.302% |
| Belarus (USD) | 7.226% | 10.226% |
| British Virgin Islands |
N/A | 5.302% |
| Bulgaria | 0.966% | 5.302% |
| Canada | 1.965% | 5.302% |
| China | 3.261% | 6.261% |
| Croatia | 2.415% | 5.415% |
| Cyprus | 2.302% | 5.302% |
| Czech Republic | 1.884% | 5.302% |
| France | 0.705% | 5.302% |
| Germany | 0.284% | 5.302% |
| Greece | 4.346% | 7.346% |
| Hong Kong | 1.946% | 5.302% |
| Hungary | 2.971% | 5.971% |
| India | 7.261% | 10.261% |
| Ireland | 1.166% | 5.302% |
| Italy | 2.739% | 5.739% |
| Kazakhstan | N/A | 5.302% |
| Latvia | 1.029% | 5.302% |
| Luxembourg | 0.522% | 5.302% |
| Mauritius | 5.38% | 8.38% |
| Netherlands | 0.383% | 5.302% |
| Norway | 1.754% | 5.302% |
| Poland | 2.812% | 5.812% |
| Romania | 4.811% | 7.811% |
| Russia | 8.72% | 11.72% |
| Russia (USD) | 5.02% | 8.02% |
| Serbia | 4.722% | 7.722% |
| Slovakia | 0.789% | 5.302% |
| Slovenia | 1.166% | 5.302% |
| South Africa | 9.206% | 12.206% |
| Spain | 1.413% | 5.302% |
| Sweden | 0.457% | 5.302% |
| Switzerland | -0.197% | 5.302% |
| Ukraine (USD) | 10.78% | 13.78% |
| United Kingdom | 1.275% | 5.302% |
| United States | 2.685% | 5.685% |