CYPRUS CORPORATE TAX

Cypriot Minister of Finance Charilaos Stavrakis is rushing to the Ukraine on Monday, to lobby the Ukrainian authorities to remove Cyprus from their “tax blacklist”, while efforts are also under way to ask for a similar meeting with Russian authorities.

Stavrakis said that during the meeting with the Ukrainian Finance Minister he will discuss the decision of his country to include Cyprus along with other countries in a black list, concerning the provision of financial information in relation to investments made in Cyprus by Ukrainian investors.
“I hope we will have a useful and successful meeting”, Stavrakis said, adding that they will discuss ways to solve the problem.

He also mentioned that his Ministry is engaged in negotiation with the Russian government on the same issue and he expects to be invited to Moscow to discuss the issue of the inclusion of Cyprus in the black list. Stavrakis noted that Russia is Cyprus’ most important financial partner.
Furthermore Finance Minster stressed that Cyprus image is not influenced or altered by certain cases of tax evasion and pointed out that banking services offered in Cyprus are of a high calibre.

“I believe that at least on a political level the right decisions will be taken and Cyprus will be removed from the black list,” he said.
Commenting on the issue of single taxation being promoted at the EU, Stavrakis said that this will result in an increase of 20%, 25% or 30% of corporate taxation imposed by Cyprus to align local tax rates with those prevailing in big European countries.

“It will be a disaster for us,” Stavrakis stressed.
“Cyprus is a financial centre, it attracts foreign investment and low taxation rates are our strongest advantage,”, he added.

Furthermore, Finance Minister admitted there is an increase in the current account deficit to 9.7% as a GDP percentage in 2007, explaining that this is due to the higher rate of growth recorded by the Cypriot economy compared to the rest of Europe, which led to an increase in imports thus expanding the deficit.
“It is no secret that during the past 4-5 years our competitiveness has been eroded due to the rise in salaries above productivity levels,” he said and pledged that the government will study the issue and all necessary measures will be taken.

FINANCIAL MIRROR