Annual Capital Allowances for Cyprus Companies and Cyprus Entities
The annual capital allowances for Cyprus businesses known as wear and tear allowances (As approved by the Cyprus tax department), are calculated on the acquisition cost of the fixed assets as follows:
| Fixed Assets | % of capital allowances |
| Buildings (Note 1) | |
| Commercial | 3 |
| Industrial, agricultural, and hotel | 4 |
| Metallic frame of greenhouses | 10 |
| Timber frame of greenhouses | 331/3 |
| Machinery and equipment (Note 2) | |
| Plant and machinery | 10 |
| Furniture and fittings | 10 |
| Agricultural machinery and tools | 15 |
| Computers & Computer hardware | 20 |
| Intellectual Property – 5 years | 20 |
| Vehicles | |
| Motor vehicles other than saloon cars | 20 |
| Forklifts, tractors, excavators, bulldozers, oil tanks, and loading vehicles | 25 |
| Ships | |
| New commercial vessels | 8 |
| New passenger vessels | 6 |
| Sailing vessels | 4.5 |
| Steamers, tugs, and fishing vessels | 6 |
| Motor launches | 12.5 |
| Second-hand commercial and passenger vessels | over its remaining useful life |
| Loose tools | 331/3 |
| Videotapes of video clubs | 50 |
| Application software | |
| Over €1.709 | 331/3 |
| Up to €1.709 | 100 |
| Other | |
| Wind generators | 10% |
| Photovoltaic systems | 10% |
| New airplanes and helicopters | 8% |
Notes:
1. Industrial and hotel buildings acquired during the years 2012-2018 (inclusive) are eligible for Cyprus capital allowances /Cyprus tax depreciation at the rate of 7% per annum. For acquisitions after 1/1/2019, the Cyprus capital allowance /tax depreciation will be 4%.
2. Plant and machinery acquired during the years 2012-2018 (inclusive) are eligible for Cyprus capital allowances /Cyprus tax depreciation at the rate of 20% (excluding such assets which are already eligible for a higher annual tax rate of tax depreciation). For acquisitions after 1/1/2019, the Cyprus capital allowances /Cyprus tax depreciation will be 10%.
3. Any expenditure of a capital nature incurred for the development or acquisition of intangible assets may be claimed as a tax deduction and will be claimed on a straight-line basis in the tax year in which it was incurred and the immediate four following years
4. Rates are amended in the case of second-hand buildings
5. Capital expenses on certain environment-friendly assets incurred during tax years 2023-2026 are eligible for accelerated tax depreciation as follows:
• 7% on capital expenses improving the energy efficiency of buildings (e.g. thermal insulation)
• 20% on capital expenses relating to technical systems for energy efficiency of buildings (e.g. thermal insulation of hot water pipes), renewable energy systems (e.g. installation of solar net billing systems), and batteries for electric
power storage.
• 33.33% on new electric vehicles of various types and electric vehicle charging stations of certain types.
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