The discussion of the package of six bills for tax reform , which provides for significant changes, for both natural and legal persons (businesses), begins in the House Finance Committee this afternoon, Friday, 7 November, in the presence of the competent Minister, Makis Keravnos , and the Tax Commissioner, Sotiris Markides.
According to the Committee's schedule, the discussion on the principle of the six bills is expected to begin at 3.15pm and is expected to be attended by over 70 people, since in addition to the Minister of Finance and the Commissioner of Taxation, other state officials , as well as representatives of several bodies and organisations, have been invited to attend.
However, in view of today's start of the discussion, yesterday both the Minister of Finance, Makis Keravnos, and the Government Spokesperson, Konstantinos Letymbiotis, sent their own messages .
More specefically, when the Minister of Finance was asked to assess whether the measures included in the six bills before the Parliament would be voted on in a timely manner, Keravnos said that "there is consensus for cooperation with the House Speaker and the members of the Finance Committee."
At the same time, he expressed his certainty that there will be good cooperation in order to achieve the best possible result regarding the passage of the six bills, noting that "it is something that will breathe new life into both our economy and society."
"The tax reform will significantly benefit individuals, families with children and students, and of course our businesses to continue their growth path," he concluded.
The Government will engage with Parliament in a spirit of cooperation and mutual understanding, seeking the broadest possible consensus to ensure that the implementation of the tax reform begins on January 1, 2026, Government Spokesperson Konstantinos Letymbiotis said.
Speaking during a press briefing, the Spokesperson said that “Cyprus is changing" is not just a slogan but a daily act of responsibility, and that the tax reform is one of the clearest proofs of this change.
He reiterated that the Government is proceeding with a comprehensive overhaul of the tax system to make it fairer, more efficient, and more sustainable, meeting the needs of citizens and the economy of today and tomorrow. He added that the six bills aim to reduce the tax burden, support the middle class, strengthen family income and employment, assist young couples in acquiring their first home, and encourage the green and digital transition of households.
Referring to the very positive indicators of the Cypriot economy, “which is currently experiencing one of its best periods in recent decades,” Letymbiotis stressed that the tax reform also carries a strong growth aspect. It promotes innovation, research, entrepreneurship, and competitiveness, with measures that encourage investment, reduce administrative costs for businesses, and establish a simple, stable, and transparent framework that enhances tax compliance and limits tax evasion, he said.
"Tax reform is not a simple accounting exercise. It is a political choice that demonstrates that when there is stability, responsibility, and planning, progress translates into tangible benefits for society. This is a reform that reaches citizens, businesses, and households," he noted.
The main changes being promoted
It is recalled that, according to the introductory reports accompanying the six bills, the goal of the tax reform is to ensure a fairer tax system, which would proportionately burden different economic strata, and strengthen tax justice, while simultaneously reducing inequalities.
The tax reform, as promoted by the Ministry of Finance, it is added, includes the revision of tax rates and the easing of the tax burden for households and businesses, the granting of targeted relief based on social criteria, the fight against tax evasion and tax avoidance, and the strengthening of tax compliance through the improvement of tax administration.
Among other things, the following changes are promoted in the bills:
- For individuals, tax scales are revised and expanded with a horizontal increase in the tax-free amount from €19,500 to €20,500,
- The corporate tax rate increases from 12.5% to 15%,
- The deemed dividend distribution on profits acquired after 1 January 2026 is abolished,
- The rate of imposition of the extraordinary defence contribution on the actual dividend distribution is reduced from 17% to 5%, for profits generated after 1 January 2026,
- The imposition of an extraordinary defense contribution on rental income is abolished ,
- A special method of taxation of profits from the disposal of cryptocurrencies is introduced with a horizontal rate of 8% (any losses from disposal can be offset against profits within the same year),
- The loss carryforward period is extended from 5 years to 7 years,
- The 120% super-deduction for research and development expenses of an intangible asset is extended until 2030,
- The threshold for mandatory submission of audited accounts by an individual is increased from €70,000 to €120,000 of gross income,
- A special taxation method of 8% is introduced on stock options (up to twice the employee's earnings) based on an approved employer benefit plan, it is noted that the benefit cannot exceed the amount of €1 million within the 10-year period,
- Increased capital allowance rates for expenses related to energy upgrades of businesses are extended until 2030.
The guests
It is also worth mentioning that, based on the agenda, the Minister of Finance, the Tax Commissioner, representatives of the Ministry of Energy, Commerce and Industry, the Ministry of Agriculture, Rural Development and Environment, the Deputy Ministry of Culture, the Deputy Ministry of Research, Innovation and Digital Policy, the Deputy Ministry of Tourism, the Deputy Ministry of Shipping and the Law Office of the Republic were invited to attend the meeting.
Also invited were the Commissioner for Gender Equality, the Superintendent of State Aid Control, the President of the Fiscal Council, and representatives of the Center for Economic Research of the University of Cyprus, which undertook to run the tax reform.
In addition to the above, representatives were also invited to the meeting :
- of the Cyprus Stock Exchange (CSE),
- the trade unions PASYDY, PEO, SEK, DEOK and POASO,
- of the Institute of Certified Public Accountants of Cyprus (ICPAC),
- of the Cyprus Bar Association,
- of the Cyprus Chamber of Commerce and Industry (CCCI),
- the Cyprus Employers and Industrialists Federation (OEB),
- of the Association of Cyprus Banks,
- of the Cyprus Scientific and Technical Chamber (ETEK),
- of the Cyprus Shipping Chamber (CSC),
- the Cyprus Investment Promotion Agency (CIPA),
- of the Cyprus Cyprus Fiduciary Association (CYFA),
- the Cyprus Investment Funds Association (CIFA),
- of the Cyprus Hotels Association (PASYXE),
- of the Association of Cyprus Tourist Enterprises (STEK),
- of the Cyprus Union of Bank Employees (ETYK),
- of the Insurance Association of Cyprus (SAEK),
- of the Association of Cyprus Travel & Tourism Agents (ACTTA),
- of the Tax Tribunal,
- of the Cyprus Economy and Competitiveness Council (COEC),
- of the Cyprus Land & Property Owners Organization (KSIA),
- of the Cyprus Property Developers Association,
- of the Pancyprian Organisation of Large Families (POP),
- of the Pancyprian Organisation of Five-Member Families (POPO),
- of the Association of Credit Acquiring Companies and Credit Servicers (SEDP),
- of the Society of Trust and Estate Practitioners (Cyprus) Ltd (STEP Cyprus),
- of the Pan-Cyprian Association of Insurance Intermediaries (PSEAD) (PSEAD),
- of the Techisland and
- of the agricultural organizations PEK, EKA, New Agricultural Movement, Pan-Agrarian Association and Euro-Agrarian.
It is noted that, in view of today's start of the debate, a series of memoranda have already been submitted to the Finance Committee by various economic actors, including the Cyprus Bar Association, the Cyprus Land & Property Owners Organization, the Cyprus Association of Property Valuers and CIBA, as well as by various other organisations.
In these memoranda, the bodies, as well as individual persons, record their opinions on the six bills and submit suggestions, either for changes or for improving the bills' provisions.
(Source: InBusinessNews)
