Cyprus Finance Minister Harris Georgiades is considering an increase of the corporate tax rate from 12.5% to 15% as part of a financial reform package.
Georgiades discussed the idea at a meeting with stakeholders last week and told CyBC radio that going through with the change would depend on whether the business community accepted it.
The proposal comes as a shock as it wasn’t tabled as part of the upcoming tax reform, neither has there been any previous mention of changing the corporate tax rate.
According to the reports, the minister has proposed measures to offset effects from the corporate tax hike that will generate annual revenue of around €170 million.
These including reducing the dividend tax from 17% to 15%, abolishing stamp duty, reducing capital gains tax from 20% to 15%, scrapping the €350 company tax and reducing taxation on interest rate income from 30% to 15%.
It is understood the corporate tax hike is less about generating revenue and more to do with Cyprus not being seen a tax avoidance haven on international blacklists.
Business leaders says the increase would be an additional tax burden despite the other form of tax relief being considered.
Source: Financial Mirror