Tax Reform: Experts suggest an end to deemed distribution of dividends

The proposed tax reform, as presented at the Presidential Palace, includes, among other privileges maintained for businesses, a complete abolition of the deemed distribution of dividends and a significant reduction in the withholding tax on the distribution of actual dividends to 5%.

At the same time, corporate tax is increasing to 15%, with the President of the Republic, Nikos Christodoulides, emphasising in his speech during the presentation that this demonstrates the government's clear will to strengthen the country's productive fabric, as well as its international image and credibility, which for his government - as he underlined - is a top priority.

As presented by economist George Syrichas on behalf of the University of Cyprus' Economics Research Centre, among the existing privileges that are maintained are the taxation of global income with exemptions/deductions where they exist for tax residents of Cyprus.

They also include the deduction of expenses for the production of taxable income, the strengthening of criteria for tax residency for companies (control and management), the deduction for notional interest (NID), the framework for intangible assets (IP Box), the shipping regime and the 50% deduction for first employment in the Republic.

President Nikos Christodoulides

"The goal," Christodoulides emphasised, "remains to invest in innovation, quality and reliability, so that Cyprus becomes a pole of attraction for quality investments and, of course, a factor of security and stability in the wider Eastern Mediterranean region."

"The goal," he went on to stress, "is to strengthen the real economy and the competitiveness of Cypriot businesses that create well-paid jobs and, above all, to strengthen the disposable income of citizens in a time of many challenges."

(Source: InBusinessNews)