News: Cyprus Will Impose Tax on Companies from EU Blacklist

The Ministry of Finance of the Republic of Cyprus has published a draft budget plan for 2021. The document contains a regulation on the additional tax for the companies, which are registered in the jurisdictions included in the EU's blacklist. The corresponding change was already approved by the Council of Ministers of the Republic of Cyprus on October 22, 2020.

Two main measures will be applied for taxation. The first is the introduction of the tax for companies on dividend, interest and royalty payments. The second measure is testing legal entities to identify their tax residency. The test will be conducted in addition to the already approved management and control test.

Today, the regulation on taxation of the companies from the blacklist has been submitted to the Attorney General's Office of Cyprus, where they must check the legality of such amendments. The additional taxation measures have already been agreed with the organization of public accountants of the republic.

Law & Trust offers its services for the corporate clients operating in Cyprus and offshore jurisdictions. We will tell you about the legal consequences of the decision of the Cypriot authorities and help you to find the optimal solution