Cyprus attracted attention at the start of the year when it raised the corporate income tax rate from 12.5 to 15%, in line with the OECD global minimum, as a part of the most significant reform of its tax system this century. However, this change formed just one element of a much broader package of reforms.
While the 15% headline rate is still amongst the most competitive in the EU, the Cyprus government also preserved three of the most important tax-efficient regimes for international holding, financing and IP companies – the Cyprus IP Box, the Notional Interest Deduction (NID) and the Cyprus holding company framework. These remain central to investor confidence and long-term planning in Cyprus.
