Tax for EU Blacklisted Companies in Cyprus
The Ministry of Finance of the Republic of Cyprus has published a draft budget law for 2021. This document provides for an additional tax for companies that are registered in jurisdictions included in the EU “blacklist”. The corresponding change has already been approved by the Council of Ministers of the Republic of Cyprus on October 22, 2020.
Two main measures will be applied for taxation:
- introduction of a tax for companies on payment of dividends, interest, and royalties;
- testing legal entities to identify their tax residency. The test will be conducted in addition to the already approved control and monitoring test.
Today, the rule on taxation of companies from the “blacklist” has been sent to the Prosecutor General’s Office of Cyprus, where they must check the legality of such amendments. Additional taxation measures have already been agreed upon with the organization of public accountants of the republic.
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