On the 18th of April 2013, the House of Parliament has voted a number of laws implementing the provisions of the agreement between the Cyprus Government and the EU, IMF and ECB on 25th of March 2013.
The most important laws voted are the following:
- Corporation Tax
The corporation tax rate has been increased from 10% to 12.5%. The increase is effective from 1 January 2013.
- Special Defence Contribution on Income from Interest
The special defence contribution on interest income (received or credited) has been increased from 15% to 30%. The increase applies to both physical and legal persons and does not include interest arising from the ordinary course of business.
- Levy on Credit Institutions
The levy payable by all credit institutions in Cyprus has been increased from 0.11% to 0.15%. The increased levy is going to apply from the date of the publication of the Law in the Official Gazzette of the Republic.
Cyprus as an International Business Centre
The above amendments do not affect the position of Cyprus as an international business centre as they most importantly do not affect the following:
- Exemption of capital gains on securities
- Favourable IP Tax regime
- Tax Deductibility of dividends
- No withholding taxes on payment dividends, interest, royalties to non Cypriots
- Extensive network of double tax treaties