CYPRUS will not accept any EU changes to its attractive corporate tax rate, the government said yesterday, in the wake of reports that Germany has proposed a harmonised minimum rate.
“In essence, there is no specific proposal,” Antonis Paschalides said, adding that there was a leak whose aim was to gauge reaction.
Cyprus, whose 10 per cent tax rate is the lowest in the EU, opposes any changes that could negatively affect its comparative advantage in attracting foreign businesses.
“We support the positive business climate in Cyprus and we try to improve it,” the minister said. “A helpful factor is the low tax rate and both Cyprus and other countries will not accept changes that will undermine this.”
Local reports over the past few days had suggested that Germany and France were looking to push for a harmonised rate of 17 per cent, causing widespread concern on the island.
On Wednesday, the Chamber of Commerce and Industry (KEVE) said it had found no reference to a harmonised tax rate of a minimum 17 per cent.
“Both a Franco-German proposal and a compromising proposal by the EU President (Herman van Rompuy) refer to a common tax base and not a common tax rate,” said KEVE chairman Manthos Mavromatis.
The Cyprus Investment Promotion Agency (CIPA) echoed KEVE in that no reference was found to a uniform minimum rate.
“It seems there is no reference anywhere regarding a minimum rate for all euro zone countries,” CIPA chairman Phidhias Pilides said, without however ruling out figures being mooted backstage.
The New York Times reported that according to a “leaked German working paper, the country wants to establish German-specified, Europe-wide standards on a variety of issues, including corporate taxes, adjustments in pension systems and legal measures that would commit countries to tough fiscal policies through a ‘debt alert mechanism.’”
Paschalides said there will be a meeting on the issue on Tuesday at the finance ministry but it would also be good to discuss changes to the island’s tax system.
“Beyond tackling the particular matter it would be good to revisit our taxation system and how businesses cope,” the minister said.
Pilides said it has been 10 years since Cyprus looked at its taxes “and I think the system we have will not last another 10 years.”
“It is about time we carry out an in-depth study of what should be done and Tuesday’s meeting could be a good start for us to think about modernising our tax system,” Pilides said.
“In essence, there is no specific proposal,” Antonis Paschalides said, adding that there was a leak whose aim was to gauge reaction.
Cyprus, whose 10 per cent tax rate is the lowest in the EU, opposes any changes that could negatively affect its comparative advantage in attracting foreign businesses.
“We support the positive business climate in Cyprus and we try to improve it,” the minister said. “A helpful factor is the low tax rate and both Cyprus and other countries will not accept changes that will undermine this.”
Local reports over the past few days had suggested that Germany and France were looking to push for a harmonised rate of 17 per cent, causing widespread concern on the island.
On Wednesday, the Chamber of Commerce and Industry (KEVE) said it had found no reference to a harmonised tax rate of a minimum 17 per cent.
“Both a Franco-German proposal and a compromising proposal by the EU President (Herman van Rompuy) refer to a common tax base and not a common tax rate,” said KEVE chairman Manthos Mavromatis.
The Cyprus Investment Promotion Agency (CIPA) echoed KEVE in that no reference was found to a uniform minimum rate.
“It seems there is no reference anywhere regarding a minimum rate for all euro zone countries,” CIPA chairman Phidhias Pilides said, without however ruling out figures being mooted backstage.
The New York Times reported that according to a “leaked German working paper, the country wants to establish German-specified, Europe-wide standards on a variety of issues, including corporate taxes, adjustments in pension systems and legal measures that would commit countries to tough fiscal policies through a ‘debt alert mechanism.’”
Paschalides said there will be a meeting on the issue on Tuesday at the finance ministry but it would also be good to discuss changes to the island’s tax system.
“Beyond tackling the particular matter it would be good to revisit our taxation system and how businesses cope,” the minister said.
Pilides said it has been 10 years since Cyprus looked at its taxes “and I think the system we have will not last another 10 years.”
“It is about time we carry out an in-depth study of what should be done and Tuesday’s meeting could be a good start for us to think about modernising our tax system,” Pilides said.
