“The issue is discussed according to our information at the highest level within the Greek government following the chamber’s presentations and in coordination with our government and our embassy in Athens. It is being thought to exempt Cyprus and three European Union member states,” Marios Tsiakkis, secretary general of the CCCI said today in an interview to state radio CyBC. “This is the last news we have and have no information whether a decision has been taken or not”.
Tsiakkis, who did not identify the source of his information, said that Greek government’s decision may be announced during president Nicos Anastasiades’s vising to Athens, scheduled for April 17.
The law, which the Greek parliament introduced in an attempt to combat fictitious transactions on March 20 and provides that importers of goods and services from affected countries will have to pay a 26% levy on the value of the imported goods and services which will be refundable if only the importer can prove the transaction actually took place, threatens to eliminate exports to Greece, Tsiakkis said.
“The law has been voted and the ministerial decisions are pending, equivalent to our regulations on how the legislation is applied,” he said. “We argued in our talks with the Greek side that such a decision is conflicting, at least in the case of the EU members, with the principles of free movement of goods and services in the single market. The EU countries could be easily separated from the rest.
He said that Bulgaria already raised the issue at the European Commission and sought an opinion, adding that he had no information whether the Greek government intends to scrap the measure all together or to exempt EU member states. The tax affects imports from Cyprus, Ireland which both have a corporate tax rate of 12.5% as well as Bulgaria which taxes company profit with a 10% rate.
“If this measure is implemented, it will destroy transactions between Greece and the affected country,” the CCCI official said adding that as imports in Greece will become 26% more expensive, importers already suffering from lack of liquidity will seek alternative suppliers in other countries.
In 2014, the value of Cyprus’s exports of goods to Greece fell 18% to €219.6 million compared to 2013 and made out 15% of its exports. The total value of exports of both goods and services to Greece are estimated at around €500 million Tsiakkis said on March 31.
Source: Cyprus Mail
