Cyprus Offshore Tax Confirmed At 10 Per Cent

by Lorys Charalambous, Tax-News.com, Cyprus

08 November 2001

The Cyprus government has confirmed that, under its tax reform proposals package sent to Brussels this week, International Business Companies on the Island will see corporation tax more than double from the current rate of 4.25 per cent to 10 per cent.

But the Cyprus International Business Association (CIBA) spoke out in support of the raised tax, 'I think 10 per cent would be acceptable to most of our members,' said CIBA president Mehran Eftekhar.

According to the local media, the move is seen as a positive step towards gaining EU accession by aligning the offshore company tax rate with that of domestic corporate taxation which will be lowered to 10 per cent from the current 20-25 per cent rates.

Providing favourable tax rates to the offshore sector over domestic companies was a point of severe criticism for the EU and the OECD and proved to be a major obstacle needing to be removed as part of Cyprus's progress towards accession to the EU.

Recommended