Professional Level Options Module Advanced Taxation (Cyprus) Monday 6 June 2011 Time allowed Reading and planning: Writing: 15 minutes 3 hours This paper is divided into two sections: Section A BOTH questions are compulsory and MUST be attempted Section B TWO questions ONLY to be attempted Tax rates and allowances are on pages 3 5 Do NOT open this paper until instructed by the supervisor. During reading and planning time only the question paper may be annotated. You must NOT write in your answer booklet until instructed by the supervisor. This question paper must not be removed from the examination hall. Paper P6 (CYP) The Association of Chartered Certified Accountants The Institute of Certified Public Accountants of Cyprus
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SUPPLEMENTARY INSTRUCTIONS 1. You should assume that the tax rates and allowances shown below for the year 2010 will apply for the foreseeable future unless you are instructed otherwise. 2. Calculations and workings need only be made to the nearest. 3. All apportionments should be made to the nearest month. 4. All workings should be shown. TAX RATES AND ALLOWANCES The following rates and allowances for the year 2010 are to be used in answering the questions Income tax rates Income Cumulative income First 19.500 19.500 nil Next 8.500 28.000 20% Next 8.300 36.300 25% Over 36.300 30% Corporation tax All companies 10% Special modes of taxation of certain kinds of income Income from the rendering of ship management services 4,25% Pensions of residents from services rendered outside the Republic (which exceed 3.420) 5% Gross amount of royalties, premiums, compensation, etc 10% Films rental, etc of non-residents 5% Profits of non-resident professional men, artists, etc 10% Capital allowances Annual (wear and tear) allowances Tractors, trenchers, excavators, bulldozers, transcavators, self-propelled shovels and loaders, drums, oil tanks 25% Motor vehicles other than saloon cars 20% Computer hardware and operating software 20% Application software (a) if not exceeding 1.710 100% (b) if exceeding 1.710 33,3% Agricultural machinery and tools 15% Other plant and machinery 10% Hotel, industrial and agricultural buildings 4% Commercial and other buildings 3% Glass houses, metallic skeleton 10% Glass houses, wooden skeleton 33,3% Interest and surcharge on unpaid tax Interest on income and corporation tax assessments 5,35% p.a. (Interest is calculated on the basis of completed months) Additional tax 5% of tax due PAYE assessments 5,35% p.a. plus a surcharge of 1% per month. 3 [P.T.O.
Value added tax (VAT) Registration limit 15.600 Deregistration limit 13.669 Capital gains tax Rate 20% Life time exemptions (maximum 85.430) General 17.086 Farmer 25.629 Residential dwelling 85.430 Immovable property tax On every Euro not exceeding 170.860 nil On every Euro from 170.861 to 427.150 2,5 On every Euro from 427.151 to 854.300 3,5 On every Euro above 854.300 4 Stamp duty 2,56 for every 1.709 or part of 1.709 for amounts up to 170.860 3,42 plus 256,29 for amounts exceeding 170.860 with a maximum amount of stamp duty of 17.086 Immovable property transfer fees 1 to 85.430 3% 85.431 to 170.860 5% 170.861 and over 8% Social insurance Self-employed 12,6% Employer 6,8% Employee 6,8% Maximum annual insurable income of employees 50.592 Other contributions by employers Social cohesion fund 2% Redundancy fund 1,2% Human resources development fund 0,5% Vacation leave fund (if not exempted) 8% 4
Retail Price Index for Capital Gains Purposes Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 1.1.80 34,96 1980 35,40 35,68 35,99 37,23 36,74 36,81 37,54 37,57 38,22 38,53 38,79 39,16 1981 39,62 39,95 40,32 40,61 40,62 41,01 41,50 41,76 41,98 42,33 42,95 43,20 1982 43,18 43,58 43,46 44,05 43,95 43,63 43,44 43,73 44,19 44,38 44,94 45,19 1983 45,59 45,66 46,08 46,66 46,31 45,69 45,70 46,08 46,17 46,64 46,80 47,06 1984 47,46 47,78 48,06 48,38 48,80 48,86 49,21 49,15 49,01 49,63 50,41 50,90 1985 50,85 50,89 51,31 51,44 51,31 50,84 50,60 51,42 52,11 52,65 51,92 51,85 1986 52,18 52,13 52,24 51,83 51,25 51,21 51,75 51,73 51,71 52,40 53,06 53,31 1987 52,76 52,63 53,23 53,04 53,41 53,88 53,10 53,82 53,91 53,71 54,16 54,53 1988 54,47 54,89 55,22 55,79 55,22 54,73 54,35 54,71 55,35 55,97 56,71 56,82 1989 57,46 57,17 57,28 57,47 56,87 56,66 56,88 57,02 57,39 58,43 58,44 58,42 1990 58,21 58,75 59,37 60,25 60,50 60,04 59,50 59,93 60,12 60,80 61,00 61,80 1991 62,18 61,69 62,18 62,65 63,08 62,44 62,63 61,71 62,87 64,54 64,77 65,83 1992 66,60 65,68 66,52 67,57 66,50 66,20 66,61 66,21 67,05 67,91 68,78 70,11 1993 70,43 68,69 69,08 70,57 69,80 69,64 70,17 69,54 70,48 71,95 72,49 72,32 1994 72,12 70,44 72,18 72,89 73,01 73,48 73,77 72,64 75,11 76,48 76,32 76,09 1995 75,34 73,46 74,92 75,47 75,49 75,49 75,83 74,62 75,49 76,82 77,38 77,33 1996 77,22 75,37 77,37 77,70 77,94 77,88 78,13 77,11 78,43 79,12 79,17 79,27 1997 79,27 78,05 80,21 80,94 80,33 80,28 81,21 79,89 81,15 82,09 82,61 82,37 1998 80,84 80,73 81,24 82,23 82,37 82,71 82,32 82,86 84,17 83,86 83,49 83,15 1999 82,80 81,66 82,96 83,19 83,42 83,54 83,78 82,99 84,72 85,42 85,65 85,99 2000 86,17 85,18 86,80 87,16 87,50 87,04 87,01 86,81 87,88 88,41 88,87 88,99 2001 87,41 87,23 88,05 88,68 88,98 89,65 87,89 88,38 89,68 90,81 90,64 91,10 2002 89,77 89,58 90,13 91,03 91,08 91,47 90,81 91,71 92,74 93,09 93,23 93,78 2003 93,45 93,55 95,51 96,11 95,73 95,15 93,84 94,41 96,11 96,89 97,01 96,12 2004 95,14 95,29 95,90 96,57 97,16 97,82 96,94 97,43 98,39 99,35 99,91 100,15 2005 98,29 98,03 98,62 99,70 99,62 99,85 98,36 99,00 100,84 102,38 102,96 102,33 2006 100,50 100,62 101,81 102,65 102,74 102,87 101,53 102,07 103,24 103,84 104,06 104,00 2007 102,15 102,08 103,33 104,47 105,00 104,78 104,00 104,59 105,96 106,95 107,73 108,07 2008 106,58 107,11 108,19 109,30 110,59 110,51 109,85 110,24 111,61 112,55 111,43 110,04 2009 107,76 107,82 109,36 110,07 110,89 110,74 108,97 109,15 110,24 111,65 112,95 112,60 2010 110,38 110,92 111,98 112,76 112,67 112,89 111,77 112,69 114,14 115,05 114,63 114,45 5 [P.T.O.
Section A BOTH questions are compulsory and MUST be attempted 1 You should assume that today s date is 22 February 2010. Aizer Mari sits opposite you in the conference room at your offices. He has been referred to your firm by a friend of his, Mike, who is also your client. Aizer is involved in a number of businesses and requires tax advice. Aizer discusses his business affairs with you as follows: (1) I was born in Apsiou village in 1942. I worked hard over the years. Today I am rewarded with a pension from the Cyprus government, which is a 13-month pension, of 2.800 a month. I also worked in the UK for around 12 years. I receive a pension from there too around 15.000 a year. (2) I returned to Cyprus 35 years ago. Initially I continued my father s pig farm business, which I inherited. I subsequently sold the business and was left with the land. I have sold around two thirds of the land to various developers over the years. Finally yesterday I signed an agreement to sell what remains of the land jointly and equally to Mike and his wife, Gabby, who want to build a house there. They don t have all the money right now. We agreed the price of the land at 950.000. They will transfer to me an apartment Mike owns in Limassol next to the sea, which is in his name. They do not own any other property. The apartment is worth around 750.000 today. The remainder will be given to me in cash. They will pay me 100.000 on 28 February when we will sign the agreement, and then a further 115.000 in 12 months time. The extra 15.000 is interest for helping them out with the terms of payment. Aizer gives you the title deed and a recent valuation of the property in question. You immediately see that the 1 January 1980 value of the property was 232.000. You look at the documents relating to the Limassol flat and see that it had a 1 January 1980 value of 200.000. (3) There s one other small plot I own in the centre of the village which is worth around 40.000. I m going to gift that to the Cyprus Church at the end of this month so they can build a new church in the village. He passes more documents to you. The 1 January 1980 value on this small plot in the village is 6.000. (4) Many years back I started a business buying and selling fruit. I toured all the villages and paid good cash to the farmers who in my opinion had the best fruit to sell. I then took the produce to the Limassol central market and sold it off. Now I have such good relations that the farmers bring the fruit directly to my large fruit market shop in Limassol and my customers flock in to buy it. I m hardly ever there even! Everything is still traded in my name and for the last six years I have been making a profit of 40.000 per year from this business. This year should be no different. I seem to be paying too much tax and want to know in future years how I can get 30.000 of that profit in my pocket after paying all taxes. This is the minimum that I would want. Also I m looking to sell off the business in around five years if I can get a good price. I m hoping to get 250.000 for it. I rent the shop. The stock at any point in time is not worth more than 50.000. So I believe my good name is worth around 200.000. (5) I also act as a marketing consultant for a number of companies. I ve been doing this for years. I advise on the product packaging and labels and also use my contacts in the food industry to help place their products in supermarkets. The work is not regular in Cyprus but I have made a good name for myself and have entered into long-standing contracts with some major food companies in France and in the UK. I get to fly five or six times a year to both countries for a few days and advise them. I earn around 25.000 a year from this. (6) I have a contact with a factory in China. They produce a cleaning cloth based on micro-fibres, which can clean surfaces without any scratches and is very resilient. So I decided to try and create my own brand. It started out as a fun exercise but I was surprised at how successful I was. I called the cloth the Ismini. I incorporated Ismini Cyprus Ltd (ICY) in Cyprus I am the 100% owner. I branded and copyrighted the name and bought advertising space on every billboard, every magazine and newspaper and every sign in Cyprus and then in Bahrain, one of the Emirates in the Middle East you know the one where there is no tax. You nod, confirming that you know where Bahrain is. You have a few clients with businesses in the Emirates and are aware of their nil tax regime. Aizer continues: Back in those days advertising was cheap. Now Ismini is a big selling product in Bahrain and I have been getting offers from supermarkets and DIY chains in some other Arab Emirates. I place the orders myself to the Chinese factory and they ship directly to the Middle East supermarket chains. I invoice them from Cyprus. A small quantity of cloths also arrive in Cyprus but 90% of the Ismini sales end up in the Emirates. I 6
buy 200.000 pieces a year. They cost ICY 0,35 each including shipping, and they sell for 2,99 each. 30% of my gross profit goes on advertising. ICY gives out 100% of its same-year after-tax profits as dividends on the 31 December every year. Required: (a) (b) Calculate Aizer s expected income tax and special defence contribution (SDC) tax payable for the 2010 tax year, in the most tax-efficient manner, assuming that the profits stated are equal to the taxable profits. Note: you should ignore temporary tax. Draft a memorandum for your tax partner addressing the following matters: (i) (ii) (6 marks) The capital gains tax treatment of the sale of the land to Mike and Gabby including the date that Aizer will need to file his capital gains tax self-assessment return. Provide a calculation of the tax payable in the most tax efficient manner, and state the base-value for future disposal of the Limassol flat; (5 marks) The immovable property tax that Mike and Gabby will pay for each of the 2010 and 2011 tax years; (3 marks) (iii) The capital gains tax treatment of the disposal of the land to be gifted to the Church of Cyprus; (2 marks) (iv) How Aizer can reduce his personal YEARLY tax liability with regards to his fruit-selling business (especially in view of his desire to sell the business in five years), as well as from his marketing consulting business. Provide advice as to the appropriate action that Aizer can take, state the maximum amount of money he can put in his pocket every year net of taxes from both businesses, and make a comparison between the tax he would pay if he did nothing and the tax he would pay if he followed your recommendations; (9 marks) (v) The value added tax (VAT) treatment of the consulting business with reference to the VAT rates and the place of supply; (3 marks) (vi) How the Ismini cloth business can be structured in a more tax efficient manner using a branch. Support your explanation with a calculation of the potential tax savings. (5 marks) Professional marks will be awarded for the appropriateness of the format and presentation of the memorandum and the effectiveness with which the information is communicated. (2 marks) (35 marks) 7 [P.T.O.
2 You should assume that today s date is 26 August 2010. (a) You are a tax manager based in the Pafos office of your firm in Cyprus. You are waiting for a new client to arrive from Ildoria who was referred to you from your firm s Ildorian office. Ildoria is a country in Asia rich in thermal coal. As you wait, your tax partner explains the little information he has available. The client is an Ildorian tax resident and his company, Transcoal Ltd (TCL), is an Ildorian tax resident company. TCL buys coal from the Ildorian coal mines and sells it to various third party agents based both in Asia and in Europe, whose job it is to find end-buyers. The agents receive a commission of 5% of the sale price. The end-buyers, who currently are all based in Russia, are invoiced directly by TCL. TCL also has one more line of activity, that of coal transportation. This line of activity involves buying transportation services from transport companies and then re-selling these with a mark-up. As the tax partner is finishing his description, Mr Ivan Ivanovitch, CEO and sole-shareholder of TCL, walks into the meeting room. He explains why he requested the meeting as follows: TCL s business is doing very well. We are targeting net profits of 950.000 this year. However, the corporation tax rate in Ildoria is quite high at 20%. We need to have an Ildorian company to buy from the mines but I can then sell to anyone. I am thinking of selling wholly to a Cyprus company. The Cyprus company will then sell on to the Russian end-buyers. Just so that you are aware, the coal market in Ildoria is going through some problems. The mine owners have staged a control war between themselves which is affecting purchasing houses such as mine. Some owners are claiming that the coal is being sold illegally and have taken the case to the Ildorian courts. Until this clears up and because of the way the agreements are structured, there is scope for litigation against any company anywhere in the world that is involved with purchasing this coal. However, at present we can still trade freely and we are simply waiting for developments. Around 70% of my profits are from the coal business. The remaining 30% of my profits are derived from the transportation services that TCL provides. For this transportation activity I have long-term agreements with many railway companies that monopolise the key routes between Ildoria and the nearest ports in Asia. Once the coal is at the ports the end-buyer is responsible for shipping. Basically I just buy and then re-sell transportation-ofgoods services. The transportation service providers are all companies based in either Ildoria or Cyprus. This business is growing stronger and stronger every year and I now even get requests to transport others coal, not just my own. I would also like to transfer this business to Cyprus. I have another Ildorian company Translending Ltd (TLL). I am the sole-shareholder of this company. TLL borrows funds from TCL at 5% and then lends them on to various third party Ildorian companies at 8,5%. The difference is also taxed at 20% in Ildoria. The amount of capital that I have on loan at present is around 1.200.000. TCL has all the cash and so will also provide the funds to the intermediary lending company, but the intermediary lending company can be located anywhere. I would like to look into whether it would be beneficial to restructure the existing loan agreements and to transfer the lending activity into a separate Cyprus company. Seven years ago I incorporated a Cyprus resident company called Boxmorgon Ltd (BML), which buys and sells shares that are listed on international stock exchanges. BML usually does well but although I have been making significant profits in most years I have also had two years where I made significant losses. I keep a very close eye on the company s cash-flow. I want BML to become a subsidiary of the Cyprus company that will be dealing with the lending activities. There are two reasons for this. Firstly, when my cash flow permits I will declare a dividend and send funds up to the lending company to be used for its lending activities. This may be every year, every two years or every three years or more, depending on when I have extra cash available. Is it possible to do this? Do you see any issues? The second reason is to utilise the losses for group tax-relief purposes in the years I make losses. I understand Cyprus has group tax-relief provisions. I also need advice on the tax consequences when I sell my shares in BML to the new Cyprus company. Of course I will declare the sale in Ildoria and I know they will be very interested to look at the transaction and ensure that the price is not understated. You see there is a flat rate 15% Ildorian tax on any gain from the sale of shares. What are my options with regards to the price? 8
I ve never declared a dividend from BML as I do not want to pay tax on this in Ildoria. As a result I do not have much cash available to me and I have been using the BML company credit card to pay for some personal items such as clothes. I also booked a family vacation with the same credit card. The bookkeeper has been asking how to deal with these funds. Can you look into this and advise me? I think the total personal charges on my card now amount to approximately 60.000. After the meeting you take some time to review the double tax treaty between Cyprus and Ildoria. The double tax treaty states that either contracting state may withhold tax of 5% on interest payments made from that contracting state to the other contracting state. You also contact your counterpart in the Ildoria office who confirms that Ildorian income tax is imposed on a physical person s taxable income at a flat rate of 40%. A physical person s taxable income includes employment income, interest income and dividend income. He also confirmed that Ildoria does exercise its right under the double tax treaty to impose a 5% withholding tax on interest payments made from Ildorian tax residents to Cyprus tax residents. Required: Draft a letter to Mr Ivanovitch providing an analysis of and recommendations on the issues raised by him in the meeting as follows: (i) (ii) The best manner in which to structure the coal business and transportation business once they are transferred to Cyprus and any problem(s) you believe may arise with regards to the former; (3 marks) Assuming that the Cyprus company will be registered for value added tax (VAT) purposes, the VAT treatment of the commission payments made to the agents; (3 marks) (iii) Assuming that the Cyprus company will be registered for value added tax (VAT) purposes, the VAT treatment of the transportation business (purchases and sales); (6 marks) (iv) Whether it would be beneficial to use a Cyprus company for the lending business. Support your advice with a comparison of the tax payable using a Cyprus company with that currently payable using the Ildorian company; (6 marks) (v) The validity of the two reasons stated by Mr Ivanovitch for Boxmorgon Ltd (BML) becoming a subsidiary of the Cyprus lending company and the options Mr Ivanovitch has with regards to the selling price of his BML shares; (6 marks) (vi) How the personal expenses paid by Mr Ivanovitch using Boxmorgon Ltd s (BML) credit card should be dealt with, providing relevant calculations of the tax effect of your recommendations. (4 marks) Professional marks will be awarded in part (a) for the appropriateness of the format and presentation of the letter and the effectiveness with which the information is communicated. (2 marks) (b) Mr Ivanovitch has heard of the Cyprus international trust. He is thinking of placing all the shares he owns in the companies referred to in your discussions into such a trust and is interested in finding out more. Required: (i) List the specific requirements for a Cyprus international trust; (4 marks) (ii) State the time period during which creditors can challenge the formation of a Cyprus international trust. (1 mark) (35 marks) 9 [P.T.O.
Section B TWO questions ONLY to be attempted 3 Andy is a freelance musician who has had tremendous success in his career. He plays guitar and has performed with some of the world s famous rock music bands. Recently he has been approached by Oval Guitars Inc (Oval), a large American guitar manufacturing company. Oval wants to produce a guitar which will bear Andy s name. Andy would receive an immediate royalty payment of 75.000 for signing the agreement as well as royalties on the sales of the signature guitars world-wide. Andy expects the agreement to generate royalty income of 50.000 per year for four years, commencing in the year following the year in which the agreement is signed. All royalty payments would be paid from Oval, which is a US tax resident company. The US imposes a 10% withholding tax on all royalty payments. Andy is uncertain whether to sign the contract in his own name, under the name of a Nordia company or to use a Cyprus company. A Nordia company would cost 1.000 to register plus another 1.000 per year to run. A Cyprus company would cost 2.000 to register plus an additional 3.500 per year to run. Andy is due to come to Cyprus and perform for three nights alongside the Blind Tigers, a famous UK heavy metal rock band. He has negotiated a fee of 9.000 for each night he performs, net of any taxes, with Strings Ltd, the Cyprus company that is arranging the event. Andy is a Nordia tax resident and does not want to change his tax residency. As an individual he pays income tax in Nordia at the flat rate of 40%. Nordia companies pay corporation tax at the rate of 6%. Dividend income in Nordia is taxed at a flat rate of 25%. Nordia does not have any double tax treaties in place and does not give relief for any foreign tax paid. Required: (a) Calculate the tax and associated costs to Andy if the agreement with Oval Guitars Ltd is signed: (i) in his own name; (ii) in the name of a Nordia company; and (iii) in the name of a Cyprus company and advise Andy on the least costly option. Note: you should ignore the tax deductibility of the company registration and running costs. (9 marks) (b) (c) Discuss the value added tax (VAT) implications arising in respect of the royalty payments if they are to be received by the Cyprus company. (3 marks) Calculate the Cyprus income tax payable on Andy s fees for the performances with the Blind Tigers and explain how payment will be made to the Cyprus income tax authorities. (3 marks) (15 marks) 10
4 You should assume that today s date is 10 June 2010. Dona has been a client of your firm for a number of years. Dona owns land that was gifted to her by her father in 1980. The 1 January 1980 value of the land is 60.000. In the year 1988, and when the market value of the land was estimated to be 110.000, she gifted the land to her personal company, Popi Ltd. The value of the land in the books of Popi Ltd is shown at market value with the corresponding credit being made to a special capital reserve. Popi Ltd erected an apartment building consisting of six, two-bedroom flats, each of the same size. The cost of construction was 234.000. In 1990, three of the flats were ready and were rented out immediately. Owing to some bad construction, the remaining three flats were not ready and required extra construction work which only ended in 1994 and cost a further 23.000. In 1994 two more of the flats were rented out but Dona kept the last flat for herself. The company claimed capital allowances on all five flats that were rented out. Dona s daughter, Elli, will be finishing school in two years time and is looking to study medicine in the United States. Due to the high costs likely to be incurred, Dona is considering selling the apartment building in two years time. She believes that the market value today is 850.000, including 500.000 for the land and that this will not change in the next two years. Dona has never made any previous disposals of immovable property. Dona has heard from Andri, a friend of hers, that she could gift the shares in Popi Ltd to another company that she would own. Her friend explained that no capital gains tax would be payable as the gift would be to a personal company. Further, that Dona could then sell the new holding company shares and no capital gains tax would arise. Another friend, Zoe, has told Dona that she could save tax by having Popi Ltd gift the property back to her now, and then selling the property personally in two years time. Required: (a) State, with reasons, whether the advice given to Dona from Andri is correct. (2 marks) (b) (c) Assuming that in 2012 Popi Ltd sells the apartment building to a buyer for 850.000, advise Dona of: (i) (ii) The corporation tax position of the company. Your advice should be supported by relevant calculations; Note: you should assume a full year s charge of capital allowances in the year the apartments were made available and none in the year of sale. (4 marks) The capital gains tax position of the company; Note: you are not required to produce any computation for this part answer. (2 marks) (iii) The special defence contribution (SDC) tax implications for Popi Ltd. Your advice should be supported by relevant calculations. (2 marks) Explain whether the advice given to Dona by Zoe is correct. Your answer should consider the tax implications for Popi Ltd as well as for Dona personally and, where applicable, refer to the corporation tax, capital gains tax and special defence contribution (SDC) tax consequences, providing relevant supporting calculations. (5 marks) (15 marks) 11 [P.T.O.
5 A request for assistance with a tax residency matter has been received from your associate office in Russia. The following information is available: Mr Mariov Stella is a director of Valyiana Inc (VYI), a large multinational company which has a subsidiary in Larnaka, Valyiana Cyprus Ltd (VCL). Mariov is considering relocating to Cyprus, in which case he would become an employee of VCL, as its Health and Safety Director. This role will mean that Mariov will have to travel quite a lot for business purposes (normally about one-third of the year), every year to visit all of the European and Middle Eastern branches of VCL in order to undertake his control checks. He will be in Cyprus for the whole of the remainder of the year as he is a workaholic and never takes holidays. Each tax year Mariov wants to be able to receive total remuneration of approximately 120.000, give or take 1.000, after the payment of all taxes and social insurance contributions. VCL has an exemption from the vacation leave fund for social insurance purposes. Required: (a) (b) (c) State the circumstances in which the exemption for employment income from overseas services (the 90-day rule) will apply. (4 marks) Calculate the total cost to Valyiana Cyprus Ltd of Mariov becoming an employee taking into account the cost of Mariov s personal income taxes, including employee and employer social insurance contributions as well as any reliefs that Mariov may claim. Note: you should ignore the 20% exemption on remuneration of first-time employees in Cyprus. (10 marks) Explain the tax consequences if Valyiana Cyprus Ltd were to pay for Mariov s rented accommodation in Cyprus. (1 mark) (15 marks) End of Question Paper 12