Costas Markides, Tax Expert and member of the Project Advisory Committee of the Cyprus Tax Reform, supports the view that the Cyprus tax reform was designed as a strategic and balanced project with a long-term horizon. At the same time, he pointed out that its success will be largely determined by the way the rules are implemented in practice.
Speaking at the 9th Cyprus International Tax Conference – Cyprus Tax Reform 2026: Implementation, Impact & Positioning in a Changing Global Tax Landscape, Markides stated that the mandate given to the working group was to redesign the tax framework in a sustainable and competitive manner for the next decade. As he explained, the reform was based on three key objectives that defined its philosophy and direction.
The first objective was to strengthen the country's international competitiveness, especially in an environment where Pillar Two, substance, transparency and predictability are at the forefront. According to the expert, these characteristics are now essential prerequisites for the sustainability of a modern tax system.
The second objective was to modernise the tax framework and remove distortions that have been created over time, with an emphasis on reducing unnecessary complexity where possible. Markides stressed that the need to adapt European directives to national law is a complex process, which makes it even more important to align taxation with real economic activity.
The third objective was to support real investment, employment and value creation, instead of structures based solely on tax incentives. At the same time, special emphasis was placed on preserving the tax base, an element that, as he noted, was a decisive factor in the overall design.
In closing, Markides underlined that the tax reform was treated as a conscious and balanced exercise between the needs of local businesses and international groups, with respect and recognition of their contribution to the Cypriot economy in recent years.
As he stated characteristically, "Tax reform should not be treated as a set of piecemeal measures, but as a comprehensive effort to balance competitiveness, international harmonisation and fiscal sustainability," noting that its success will be largely determined by the way the rules are implemented in practice.
(Source: InBusinessNews)
