19.8 C
Wednesday, October 4, 2023

Locks horizontal corporate tax 15%

Must read

& Kappa; & lambda; & epsilon; & iota; & delta; ώ & nu; & epsilon; & iota; & iota; r ; & zeta; ό & nu; & tau; & iota; & omicron; & sigmaf; & epsilon; & tau; & alpha; & iota; & rho; & iota; & kappa; ό & sigmaf; & phi; ό & rho; & omicron; & sigmaf; 15%

& nbsp & nbspΑδάμος Αδάμου & nbsp; & nbsp;

The decision to increase the corporate tax from 12.5% ​​to 15% should be considered taken, horizontally and without exceptions, despite the requests of the Cypriot business in this direction.

This emerges from a letter sent by the Director General of the Ministry of Finance a few days ago to affected groups, such as service associations, employers' organizations and other stakeholders, in the context of the tax reform being promoted.

According to the letter, “the main axis of the proposed tax reform is mainly focused on increasing the corporate tax rate from 12.5% ​​to 15%, horizontally for all companies subject to corporate tax, in accordance with existing tax legislation.” p>

SEE ALSO: & nbsp; Corporate tax increases, other taxes abolished

The increase of the corporate tax to 15% had been announced by the Minister of Finance Konstantinos Petridis, in the context of the presentation, last year, of this year's budget, as a result of the agreement reached within the G7 and the OECD. However, until recently, the business world suggested exceptions to the rate increase, so that it does not apply to all companies, while it had also proposed a series of compensatory measures.

In its letter, the Ministry of Foreign Affairs does not exclude the latter, however – this was also the purpose of the information on the issue – but limiting the range of suggestions for compensatory measures. In particular, the recipients of the letter, in the context of the public consultation on the issue, were invited to send suggestions by the end of February for measures that could be taken to offset the increase in corporate tax, informing that their suggestions should cover measures. regarding the taxation of dividends, interest and the apparent distribution of profits.

According to data provided by the Ministry of Finance, in the three years 2016-2018 the average income from corporate tax was 470 million euros, from the estimated dividend distribution of 43 million euros, from the actual dividend distribution of 59 million euros and from taxation of interest at EUR 60 million.

As YPOIK notes, the goal of the modification of the tax framework that it processes is to respond to the new data, while remaining competitive and attractive. At the same time, it is added, it seeks to comply with the commitments arising from the Recovery and Sustainability Plan (SAP) of the Republic, but also with other international developments. & Nbsp;

By the same letter, its recipients are also informed and for the following milestones agreed under the SAA that will affect the country's tax framework: & nbsp;

• & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; to jurisdictions with a low tax rate (the definition of “jurisdictions with a low tax rate” has not been finalized). With regard to the payment of interest and royalties, it may be possible to consider the application of the rule of non-deductibility instead of withholding tax. & Nbsp;

• & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; By December 31, 2024 a study (by an independent firm) must be completed assessment of the tax framework of Cyprus, in terms of extreme tax planning. In the event that provisions that lead to extreme tax planning are identified in the tax legislation, relevant decisions should be taken within the 2nd quarter of 2026 to delete the provisions in question. & Nbsp;

• & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; nbsp; and acquisitions (incentives may be non-tax). & nbsp;

Extension of incentives to attract companies

The Ministry of Finance also informs in relation to the tax reform that it is drafting legislation to improve the tax framework of investment funds and that other bills are promoted in the context of incentives that already work to attract companies and research.

Among those promoted is the renaming of “The Law on Extraordinary Contribution for the Defense of the Republic of Democracy”, to “The Law on Contribution for Development and Sustainability”, a development that has also been expected for a long time.

A bill is also being promoted with the aim of granting an increased discount of 120% of the actual expenditure incurred for scientific research as well as research and development, for 3 years, with the aim of encouraging companies and individuals engaged in business to invest in research and development and legislation for time extension (until 31/12/2023) of the tax relief on the expenses incurred by a natural person who is an independent investor, either directly or through an investment fund in an approved small and medium enterprise.

In addition, the expansion of the existing framework is promoted, so that the investment by corporate investors under certain conditions, is deducted from the taxable income. Also, in the context of the efforts to make the tax framework more attractive for young employees in the Republic, in the context of the action plan for attracting companies to operate or expand their activities in Cyprus, it is promoted as a 50% exemption from natural income tax. to pay more than 55 thousand euros, instead of more than 100 thousand euros.

Source: www.philenews.com

- Advertisement -AliExpress WW

More articles

- Advertisement -AliExpress WW

Latest article