T&L D-briefs - July 2024
In this issue, we:
- Share recent tax developments.
- Remind you about the key considerations in relation to the global minimum tax rules.
- Inform you about the importance of the automatic exchange of financial information for Cyprus tax residents.
Pillar Two is here to stay! Ready to take action?
Navigating the Global Minimum Tax era is already a reality for Multinational Enterprise Groups (MNE Groups) with a total consolidated turnover exceeding €750 million per annum.
But how does this impact Cyprus companies within these MNE Groups? This article delves into the Pillar Two rules and highlights key considerations for the in-scope groups.
The (tax) impact of automatic exchange of financial information
Several Cypriot tax resident individuals have recently received tax assessments in relation to passive income earned from overseas financial institutions.
Want to understand why? Please read our article which deal with the Automatic Exchange of Information as mandated by the Common Reporting Standard and the Foreign Account Tax Compliance Act.
International Tax Developments
European Commission Publishes Annual Report on Taxation
On 2 July 2024, the European Commission published its Annual report on Taxation 2024 (the Report), which presents a review of the design and performance of the EU Member States' tax systems. According to the Report:
- the overall tax burden (including social contributions) across EU Member States ranges between 20% to more than 45% of GDP. Cyprus is at 36,5% which is below the EU average of 40%.
- personal income tax (PIT) accounts for 23.9% of the total tax revenues in the 27 Member States (EU-27) whereas corporate income tax (CIT) represents only 8.1% (18.1% for Cyprus).
- both statutory and effective corporate income tax rates have decreased over the last two decades, but such reduction has not resulted in a decrease of CIT revenues as a share of GDP.
Local Tax Developments
Full Consent for Pillar Two Safe Harbour Rules
The Cypriot Ministry of Finance has expressed its consent for the safe harbour rules under Pillar Two of the OECD Inclusive Framework on BEPS as per Article 32 of the Minimum Taxation Directive (2022/2523). The full text of the press release of the Ministry of Finance dated 24 July 2024 can be found here (in Greek only).
The Directive has not been transposed into domestic legislation as at this date. We anticipate that the legislation will be voted within the coming months.
Mark your calendar!
1 AUGUST 2024 |
31 AUGUST 2024 |
Payment of the 2023 tax balance through self-assessment by individuals preparing audited financial statements and companies. |
Payment of the second instalment of the premium tax for insurance companies (life business) for 2024. |
Archive
The previous T&Legal D-briefs are available below.
T&L D-brief January 2024
T&L D-briefs November 2022
T&L D-briefs September 2022
You can also find the rest of our archived videos on Youtube.
Contact Us
For general queries and comments on Tax Webcasts, please send an email to cyprusTLdbriefs@deloitte.com.
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