October 11th, 2023
The Ministry of Finance of the Republic of Cyprus has prepared and proposed a harmonizing law on October 23rd 2023 entitled “Ensuring a Global Minimum Level of Taxation of Multinational Enterprise Groups and Large-scale Domestic Groups in the Union, Law of 2023” with the purpose of harmonizing domestic law with Directive (EU) 2022/2523 of the EU Council dated December 14th 2022 otherwise known as ‘Pillar 2’, on ensuring a global minimum level of taxation of multinational business groups and of large-scale domestic groups in the Union.
The harmonizing law proposes a minimum effective tax rate of 15% on entities belonging to Multinational Business Groups or large-scale domestic groups with annual revenues exceeding €750 million, to end harmful tax practices that allow such entities to shift profits to very low or zero tax jurisdictions and oblige them to contribute their share of taxation.