The Ministry of Finance of Cyprus has announced its intention to amend the Intellectual Property tax regime in order to implement the recommendation of Action 5 of the Base Erosion and Profit Shifting (BEPS) project (05.10.2015), as well as the Conclusion of the ECOFIN Council (08.12.2015).
In a nutshell, the BEPS project has been developed by the OECD in order to provide governments with solutions and detailed guidelines on how to implement the said solutions, aiming to modernize international tax rules.
The BEPS package consists of fifteen (15) Actions. The Ministry in its announcement made a specific reference to the implementation of Action No. 5, which was developed in order to “counter harmful tax practices more effectively, taking into account transparency and substance”.
Furthermore, the objective of this specific Action is to “revamp the work on harmful tax practices with a priority on improving transparency, including compulsory spontaneous exchange on rulings related to preferential regimes, and on requiring substantial activity for any preferential regime. It will take a holistic approach to evaluate preferential tax regimes in the BEPS context.”
For information on the IP Tax Regime of Cyprus under its current form, you can check out our related brochure. It will be updated, as soon as further details are available on the amendments.
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