ICPAC Proposes 14 Key Changes to Cyprus Tax System

Lead: The Institute of Certified Public Accountants of Cyprus (ICPAC) recently shared its insights on proposed tax reforms with Finance Minister Makis Keravnos. The suggestions, stemming from a consultation process influenced by the University of Cyprus’ Economics Research Centre, outline a vision for a refined taxation framework designed to streamline procedures and bolster economic growth.

Key Tax Reform Suggestions

– ICPAC has put forward 14 specific recommendations focused on modernizing the tax system, including:
– Tax loss carry forward
– Qualifying refundable tax credits
– Intellectual property nexus regime
– Incentives for foreign investment funds

Impact on Taxpayers and Businesses

– These recommendations aim to:
– Reduce the overall tax burden on taxpayers and businesses
– Consolidate the tax base for increased transparency
– Simplify the tax structure to minimize bureaucracy

> “We also expected to see proposals that will reduce the ever-increasing administrative compliance costs for small and medium-sized enterprises, which undoubtedly constitute the backbone of the Cypriot economy,” stated ICPAC.

Concerns and Areas for Improvement

– While supportive of the government’s tax package, ICPAC has raised several concerns:
– A need for simplification of the tax framework
– Recurrence of administrative and compliance costs
– Legal clarity regarding proposed changes like lifting the corporate veil and adjusting salaries to market rates

Support for Business Growth

– ICPAC emphasizes the importance of enhancing Cyprus as a premier business destination. Recommendations include:
– Abolition of deemed dividend distribution
– Adjustments to withholding taxes for actual dividends
– Continuous improvement in service quality and internal processes beyond taxation

> “Our basic position is to enhance the value and credibility of Cyprus as a business destination of choice and quality,” said an ICPAC representative.

Future Considerations and Sustainability

– Addressing future policies, ICPAC supports:
– The principle of extending the Non-Dom regime after 17 years
– Initiatives for a green transition and digital transformation, though more targeted measures are necessary

Conclusion: The ICPAC’s proposed reforms to the Cyprus tax system signal a commitment to creating a more streamlined, transparent, and business-friendly taxation environment. With these suggestions, the institute aims to support the backbone of the Cypriot economy—small and medium enterprises—while ensuring the country remains a competitive player on the global stage.

Keywords: ICPAC, Cyprus tax reform, tax system suggestions, business environment, tax burden, financial incentives, SME support, Non-Dom regime, green transition.

Hashtags: #CyprusTaxReform #ICPAC #BusinessGrowth #SME #Taxation #Finance



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