Amendments to the tax legislation

Income tax

On the 18th of April, the Cyprus parliament approved an amendment to the Income Tax laws under which Cyprus Corporate Tax Rate increased from 10% to 12.5% effective for the tax year 2013.

Special defence contribution

The rate of special defence contribution on interest earned by persons, individuals or corporations, who are residents of Cyprus is increased from 15% to 30%.

Value Added Tax (VAT)

The standard VAT rate was increased in Cyprus from 17% to 18% for the period 14 January 2013 to 12 January 2014, and will increase to 19% thereafter.

Moreover, the reduced VAT rate increases from 8% to 9% as of 13 January 2014 (this mostly applies to services offered by hotels and restaurants).

Special Levy on Credit Institutions Law

The Special Levy imposed on credit institutions operating in Cyprus on their total deposits (domestic and foreign) increases from the current 0.11% to 0.15% with effect from 1 January 2013.