The Cyprus taxation authorities have come forward with important clarifications in relation to the interpretation of exemptions from stamp duty in relation to mortgage documentation applicable to Cyprus vessels. The relevant clause 4.3(e), which is found in the First Schedule of the Stamp Duty Act of 1965, as amended, provides for an exemption from stamp duty in relation to an “agreement and any other instrument regarding the mortgage of a vessel registered in the Cyprus Ship Register or a share of the vessel or any other interest in relation to the vessel”.
The Cyprus taxation authorities have confirmed that the following instruments fall within the scope of the exemption and, therefore, no stamp duty is payable thereon: the Deed of Covenants, which is customarily attached on the mortgage instrument for financing a Cyprus vessel, as well as any modification thereof; any loan or guarantee agreement, or any other instrument which creates contractual obligations, that is secured with a Cyprus vessel mortgage, as well as any amendment or addition in such a contract, guarantee or instrument, and any instrument which establishes a charge, lien or any other security on the payment of a debt or the performance of a promise, which is required for signing in accordance with the terms of such loan agreements, guarantees or other instruments referred in (b) above, as well as any amendment of such an instrument.
All such documents constitute part of the aforementioned shipping transactions and, as such, fall within the exception provided in the existing provision of Article 4, First Schedule, item 3(e) of the Act as amended. The above guidance sets out important drafting requirements in relation to the above documents, since provisions should be contained therein which lucidly establish their relationship with vessel financing and mortgaging of a Cyprus vessel.
For more information, please contact us at This email address is being protected from spambots. You need JavaScript enabled to view it.
Back to NewsFollow us
1 Kinyra Street, 5th floor
1102 Nicosia
115 Faneromenis Avenue,
Antouanettas Building
6031 Larnaca
12 Platonos Street,
3027 Limassol
4 Nicou Nicolaidi & Kinyra,
2nd floor, 8011 Paphos
164A Georgiou Gourounia,
1st floor, 5289 Paralimni