CHANGES TO TAX RATES
The Republic of Cyprus has made a number of changes to its tax rates pursuant to the implementation of the decision of the EuroGroup. The most relevant changes are described and analysed below:
- Increase in the Corporate Tax rate
The corporate tax rate is increased from 10% to 12.5%, with effect as from January 1st 2013.
- Transfer and carry forward of tax losses by credit institutions
As from 25th March 2013, in case of transfer of operations, assets, rights or obligations from one credit institution to another under the Credit Institutions Resolution Law, any accumulated losses of the transferring credit institution at the time of the transfer, are transferred to the acquiring credit institution and may be used by it for a period of up to 15 years from the end of the year during which the transfer took place.
- Increase in Special Defence Contribution (SDC) on interest
The SDC tax rate on interest has increased from 15% to 30%. Such increase shall take effect from the date of publication of the law in the Official Gazette of the Republic of Cyprus. Note that SDC tax is payable only by tax residents of Cyprus, whereas non-resident individuals and companies are exempt.
- Annual Levy on bank deposits
Pursuant to existing legislation, a bank levy is charged on banks and credit institutions at the rate of 0.11%. As from 1st January 2013, this rate is increased to 0.15%.
