In June 2021 the Minister of Finance Mr. Petridis announced that major reforms will take place to the current tax system in Cyprus which was lastly revised in 2002.
The revision aims to create a modern tax framework that is consistent with the new economic model which is also promoted through the National Recovery and Sustainability Plan.
It is also necessary to amended the tax system, to improve the business environment that in turn affects the competitive advantage of the businesses and the overall economic growth.
Moreover, the recent international developments alongside with the changes in taxation relating to the elimination of aggressive tax planning, taxation of multinational enterprises (MNEs) and digital taxation play a principal role in the creation of the need to amend the current tax system.
The Minister of Finance Mr. Petridis commented that the decision for the revision of the current tax system is final and it is hoped that by the end of the year or the beginning of 2022 the new tax reform package will be available.
The tax reform is expected to include amendments in the areas of taxation of individuals, corporations as well as special defence contributions.
Now it is left to see what will be the outcome of the dialogues of the Ministry of Finance with the several stake holders and what the tax reform package will actually include.