On the 18th of April, the Cyprus Parliament voted for new tax laws which are in accordance with the provisions of the loan agreement between EU lenders and Cyprus.
- Cyprus Corporate Tax Rate increased from 10% to 12.5% effective for the tax year 2013.
- Defense Contributions on interest income derived from deposits will increase from 15% to 30%. This will take effect from the announcement in the official gazette of the Republic of Cyprus.
- Increase on the special bank levy from 0.11% to 0.15%. This measure will be effective from the tax year 2013.
Even with the small increase of 2.5%, Cyprus remains one of the lowest tax jurisdictions in the EU and the increase does not affect holding companies. Additionally, Cyprus holding company regime such as the tax free flow of dividends through Cyprus and the beneficial exit opportunities offered by Cyprus’s favourable national tax legislation and wide network of double tax agreements remain. Cyprus does not impose capital gains tax, except on gains deriving from real estate in Cyprus.