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Cyprus May Accept 12.5% Corporation Tax, Says Presidential Advisor


14/03/2013

The head of Cyprus's new Economic Policy Council has indicated that Cyprus would accept a rise in corporation tax from 10% to 12.5% as part of a bailout deal, as long as it did not rise further for at least a decade.

Christopher Pissarides put forward the proposal to state media as the country continues to negotiate the terms of a bailout from the European Union and the International Monetary Fund. He explained that a rise in corporation tax was not important in itself, but that businesses must be confident that it will remain the same for a long time afterwards.

Cyprus applied for a bailout in June 2012, making it the fifth European country to do so, and it is seeking around EUR17bn to recapitalize its banks. The country has already implemented a number of tax rises, including a 2% rise in VAT to 17%.

The Economic Policy Council oversees the economy and advises the president on macroeconomic issues. Pissarides, who won a Nobel Prize in Economics in 2010, was appointed as its head by Cyprus’s newly-elected president Nicos Anastasiades last month.

www.tax-news.com

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