Cyprus bailout - 10% tax on bank accounts

[CWI]

Hi all,


I have to admit I am quite concern about the recent developments in Cyprus due to the bailout, and I am sure a lot more people may be as worried as I am.


One of the conditions for the Cyprus banks bailout is the fact that all bank accounts over 100000€ will be taxed 10% with immediate effect.


I have an IBC incorporated in the Seychelles with a bank account in Cyprus.


Does this tax only apply to resident individuals and companies, or offshore companies with bank account in Cyprus are also affected?


Any help would be greatly appreciated.

 

[JohnLocke]

The threat was made as eurogroup finance ministers on Friday night ratcheted up the pressure on Michael Sarris, the Cypriot


minister, to impose a 9.9 per cent levy on deposits over €100,000 as a key condition for a €10bn bailout by international lenders.


Smaller deposits will be cut by 6.75 per cent.


Will update this thread Tuesday when we know more..

 

[JohnLocke]

The Eurogroup's decision about the Cyprus Banks took us all in Cyprus by surprise. Nobody was expecting such a decision.


All bank deposits are affected, including deposits / bank balances of foreign companies, maintained with Cyprus Banks.


We constantly monitoring the developments and will keep you posted.

 

[JohnLocke]

It seems to be a on off tax on current funds, not something ongoing, you can find more information here as well; contact us

 

[CWI]

It has not been approved by the parliament yet, but everything is pointing in the way that it will be.


The tax is not my only concern. At this point I am already considering a loss. If its fair or not that is another story.


My biggest concern is the hold on all transfers and how long it will last. I have payments I need to do and right now I have no idea of when I can make them.


I think this will be terrible for Cyprus' financial system. I am thinking of getting all my money out the first chance I get, and I bet more people are thinking the same. All confidence is gone now. Something like this will probably be more harmful to Cyprus economy and financial system than the "cure" proposed/ imposed by the Eurogroup.

 

[CWI]

Double post.

 

[Zqq]

There are talks about extending the bank holiday until Wednesday, stopping banks from making international transfers. I'm happy I only had pocket change left in Cyprus.


It will be a cold day in Hades before I put any money there again.

 

[JohnLocke]

Well, it is a one time tax as it is for now, we can only follow the development of the situation. But for sure other banking options should be considered.

 

[zonez]

There's talk about dropping the 6.75% levy on < 100K and raising the 9.9 to 12.5% for > 100K ..

 

[MrSmith]

Something like this will probably be more harmful to Cyprus economy and financial system than the "cure" proposed/ imposed by the Eurogroup.

Harming Cyprus economy is the whole point, EU didn't just want Cyprus to raise money; they SPECIFICALLY demanded to do it this way, knowing it would cause headlines forever scaring slaves not to dare to look into alternative countries.

 

[DayTrader]

<20,000: 0%


20,000-100,000: 6.75%


>100,000: 9.9%


I'd be very surprised if this did not result in a bank run.

 

[MrSmith]

I'd be very surprised if this did not result in a bank run.

People are blocked from transferring their money,


the ATM's have suspiciously low withdrawl limit (I can only withdraw 200 euro per week, this may have been planned for a long time),


the banks are closed so you can't take money over the counter.


After the charge has been made however, ppl might still run their money, but less justified.

 

[CWI]

Last news I read was that deposits under 100000€ should not be taxed.


Anyway, the banking system works based on trust and once trust is gone Cyprus banking system will see depositors and investors flee to other places. Even if nothing happens now everyone knows that is a possibility and the harm is already done.


In fact, not only Cyprus will be affected by this crazy plan. All countries under bailout or on their way to be bailed out are now under suspicion that something like this can happen.

 

[Zqq]

A new proposal being thrown around would leave small-time savers unscathed.


Under 20,000 - no levy.


20,000 to 100,000 - 6.75%.


100,000 and up - 9.9%.

 

[zonez]

the ATM's have suspiciously low withdrawl limit (I can only withdraw 200 euro per week, this may have been planned for a long time),

I get that feeling too.. My limit was lowered from 5000/day to 800/day, somewhere in november last year

 

[JohnLocke]

You may find factual news here, resource we will need to cross our fingers and hope they very soon agree to something.

 

[CWI]

Being an EU citizen, based on previous examples, I do not expect any help from Europe without severe consequences for Cyprus' economy. This is what happened in Greece, Portugal, Ireland and now Spain.


Russia looks like Cyprus' best bet at the moment.

 

[JohnLocke]

As far as we have been informed the banks will keep closed until Tuesday, more information can be found here Euro zone weighs Cyprus bailout and whether depositors should help pay | Reuters

 

[JohnLocke]

We are working on alternative bank's at the moment and will have more information available by tomorrow. Existing clients will be informed directly.

 

[JohnLocke]

The best you can do to follow the situation in Cyprus at the moment is to follow the updates here Search Results