Cyprus is to toughen its tax system in order to get the third tranche.

06.06.2014

Cypriot government introduced bill that shall open the third tranche in amount of 10 billion euro for the country from international troika of creditors (European Commission, ECB, IMF).

The bill suggests measures in order to implement Memorandum that has been already concluded between troika and Cyprus in March, 2013. So, Revenue Service and Department on VAT will be united into Revenue Council. Tax authorities are entitled to freeze and to confiscate money from debtor’s bank accounts. Besides this revenue service will be able to arrest estate property until the full repayment of debt. Main focus will be on those ones who have big debts and no desire to cooperate with revenue services.

Voting on the Revenue Council creation shall be held on the 10^th of June. And the decision on the third tranche will be made on the 19^th of June, 2014.

Source:

http://www.moi.gov.cy/moi/pio/pio.nsf/All/20B848B51DD5D479C2257BCE001CB6C7/$file/MOUEN.pdf?OpenElement

Expert’s opinion

Decision on additional measures on the toughening of the tax sphere Cypriots were forced to take in March, 2013. When it is about the country’s economy there is really no choice left.

Nonetheless, new state duty, increased up to 12,5% corporate tax rate did not become flat refusal from working with Cyprus.

Taxes shall be paid, including taxes on real estate. Cypriot hospitality is not going anywhere, it is loyalty that they tend to have less: debts shall be paid.

I dare to say, that the interest for the jurisdiction will not disappear and in time everyone will forget about “Cypriot spring”

Irina Lomakina ( Director of Moscow Office of Honest & Bright)