Government’s Plan for Tax Reform in 2022 – announcement of improve national taxation framework through the reduction of administrative burden associated with compliance.

The Minister stated that increasing corporate tax in Cyprus from 12,5% to 15% will not significantly affect the foreign investments in Cyprus.

The main matter for the tax reformation to be examined are as follows:

  • Increase of corporate tax from 12.5% to 15%;
  • Reduction or abolition of the €350 annual company levy;
  • Reduction of contribution on interest income;
  • Reduction or abolition of the special defense contribution on the deemed and/or actual distribution of dividends;
  • Adaptation of value-added tax rates based on the recent ECOFIN decision for products associated with public health and green digital transition;
  • Implementation of carbon taxation with a gradual increase of taxation on fossil fuels and imposition of environmental levies.