"The government has no information about the possible withdrawal of companies and their relocation to other countries, nor are there objective reasons that would justify such a development," Minister of Finance, Makis Keravnos, has said, in relation to the implementation of the Pillar 2 tax rate (15%), noting that "Cyprus will continue to have a favorable tax environment" and that there is no concern about the issue.
Explaining that the Ministry of Finance is preparing an amending bill on this specific issue, following a decision by the European Commission, he added that this is a standard procedure that is always followed as a result of consultation with the European Commission and for necessary harmonisation with the obligations of the Republic of Cyprus, "which arise specifically for this issue, from the framework of the Organization for Economic Cooperation and Development."
Keravnos clarified that Pillar 2 does not impose a 15% tax on all businesses in Cyprus and specifically that it concerns very large multinational and domestic groups with annual revenues exceeding €750 million.
"Nor does it mean that even these companies, with this turnover, will pay an additional 15% tax. It means that, where the actual tax rate, which in the case of Cyprus, as you know, is 12%, falls short of the 15% for the taxation of a group, the difference is paid up to this minimum level, according to specific and particularly complex rules.
"This is not a decision taken by the Republic of Cyprus on its own. It is part of the international agreement of the OECD, the G20 and the European Union on global minimum taxation, which has also been incorporated into European Union law," he clarified.
No information on possible company withdrawals
"The government has no information about the possible withdrawal of companies and their relocation to other European Union member countries, nor are there objective reasons that would justify such a development."
A few European Union countries are temporarily exempted from the implementation of the legislation until 2029, due to the fact that they have fewer than 12 parent multinational companies in their country. From 2029, however, all countries will be subject to the same regime”, reassured the Minister of Finance, underlining, at the same time, that “Cyprus will continue to have a favourable tax environment. Relevant investment incentives and significant advantages, which also stem from its strategic geographical location, will continue to exist, especially in view of the broader geopolitical developments that give it a special economic and political status. Therefore, there is no concern.”
The Minister of Finance wanted to comment on the issue as, as he said, "in recent days, there have been reports from a section of the press and the media, which have created concern about pressure from the European Union on Cyprus and the risk of large companies leaving due to the implementation of the Pillar 2 tax rate, the well-known 15%."
He attributed these reactions "rather to individual voices, which, if they do not serve personal interests, seem to arise from certain obsessions."
(Source: InBusinessNews)
