President Anastasiades announced major tax reforms during his speech at the CIPA Investment Awards ceremony at the Presidential Palace on the 1st of July 2015.
The President stated that it is the government’s duty to create the right environment where business can flourish.The tax reforms announced include:
(1) A deemed tax deduction for new capital introduced in Cyprus.
(2) A new term of domicile will be introduced by a new law. A person who qualifies as a Cyprus tax resident and at the same time is deemed to not be domiciled in Cyprus will not be subject to Special Defense Contribution. This is a very significant reform which will render out tax system even more attractive.
(3) Immovable property transfer fees will be reduced by 50% by the 31st of December 2016.
(4) Any property bought after the new legislation comes to force and before the 31st of December 2016 will be exempt from any future capital gains tax.
(5) A single tax rate of 1 /1.000 will apply as immovable property tax based on the value of the most recent valuation conducted by the Land Registry. This tax will apply to all properties and there will no longer exist progressive tax rates. Moreover, there will be a 10% reduction of the amount to be paid as tax for those who pay early and an exemption on all taxes that do not exceed €25 per owner.
(6) The municipal and community taxes paid to local authorities by owners of immovable property will be abolished.