The president Christodoulides, in a recent presentation, has outlined the major updates coming with the Tax Reform, aiming to provide financial relief for both individuals and businesses.
The reform includes an increase in the tax-free income threshold, additional deductions based on household composition, and significant tax cuts for businesses through the abolition of existing levies.
These changes are designed to create a fairer and more competitive tax system, supporting families and fostering economic growth. These are the main points from this presentation.
Increase in Corporate Tax:
The corporate tax rate is proposed to increase from 12.5% to 15%.
Increase in Tax-Free Income:
The tax-free income threshold for individuals will increase from €19,500 to €20,500.
Abolition and Reduction of Taxes:
- The deemed distribution of dividends for special defense contribution purposes will be abolished.
- The defense tax on dividend distribution will be reduced from 17% to 5%.
Additional Tax Changes Under Consideration:
- A fee of €800 may be imposed on large businesses.
- A property tax may be introduced on high-value properties or idle land.
Implementation date.
The relevant bills are expected to be approved within the year, with the tax reform set to take effect from 2026.