Abolition of the Company Annual Levy in Cyprus
In a key decision by the Council of Ministers on February 21, 2024, the annual levy of 350 euros has officially been abolished. This decision, effective immediately, signifies a pivotal shift in Cyprus’s approach to fostering a supportive environment for businesses. Connor Legal is at the forefront, offering insights and guidance on this significant development.
The imposition of the company annual levy in Cyprus was initially enacted in 2011 as a fiscal measure aimed at consolidating the national budget. Its removal marks a turning point in the government’s strategy to enhance business sustainability and growth within Cyprus.
The debate around the company annual levy in Cyprus gained momentum with the recent change in government, leading to vigorous discussions within the parliament’s Trade Committee. Despite the Treasury’s initial reluctance due to concerns over a projected loss of €40 million in annual revenues for 2024, the advocacy for the levy’s abolition prevailed. This was against the backdrop of the Treasury advocating for a gradual phase-out, contingent on a company’s turnover, to cushion the anticipated revenue impact.
This decision comes in light of disclosures to Parliament indicating a substantial backlog of unpaid levies, totaling around 30 million euros, owed by a significant number of companies, including dormant entities. This revelation underscored the urgency for reform.
As the Cyprus business community welcomes the abolition of the company annual levy, attention is now focused on the Registrar of Companies for subsequent steps, particularly regarding the potential refund of the levy for companies that have already made payments for 2024.
Connor Legal is poised to assist businesses in adapting to this change, ensuring they leverage the removal of the company annual levy in Cyprus for their benefit. Our expertise in Cyprus corporate law positions us uniquely to guide companies through this transition, ensuring they capitalize on the opportunities this new regulatory landscape presents.
