The Cyprus Stock Exchange (CSE) is asking the government to reduce the share transaction tax, which currently ranges from 0.60% to 1%, in order to attract more foreign investors and make the exchange generally more competitive in international terms.
The proposal, put forward in a recent meeting of the House Finance Committee, is being backed by the majority of the committee's members and would reduce the transaction tax to a flat rate of 0.15%. At present a two-tier tax is levied at 0.60% on individual trades and 1% on legal entities.
Whilst the CSE chairman Akis Kleanthous conceded that this would mean an initial loss of CYP1 million in revenues for the government, he pointed out that the subsequent boost in volume brought about by a more attractive tax rate would soon offset the shortfall.
The CSE and the Athens Stock Exchange (ASE) are due to launch a common trading platform on December 31, 2005, although its commencement may be delayed by up to six months whilst Nicosia seeks to bring the CSE's regulations into line with the Athens bourse.
A comprehensive report in our Intelligence Report series examining offshore investment, offshore stock exchanges, and hedge funds is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report9.asp
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