World Tax Update :: EUROPE, MIDDLE EAST, & AFRICA
EUROPEAN NATION CYPRUS
CONSIDERING TAX INCREASES AS
PART OF BAILOUT NEGOTIATIONS
Negotiations for a potential financial bailout of European nation Cyprus
may include consideration of a potential increase in the country’s
corporate tax rate of up to three percent, which could raise up to EUR
180 million per year.
In addition, consideration is being given to a financial transaction tax and a
temporary capital gains tax. The capital gains tax rate would be 0.1% for stock and
bond trades and 0.01% on derivative trades. Cyprus has been a hot topic lately as
the country faces allegations of facilitating money laundering and is seeking a
financial bailout loan of up to EURO 17 billion in exchange for the tax increases.
Ireland faced similar demands for tax increases as it secured a bailout in 2010, but
was able to maintain its corporate tax rate at 12.5%.