New tax scheme approved for research and development

The Cabinet of Ministers on Wednesday announced the approval of a 20 per cent tax cut for research and development projects.

The tax cut is part of the broader strategy of attracting foreign companies and investments from abroad to Cyprus.

In statements after the Cabinet meeting, Finance Minister Constantinos Petrides stated that this “is a tax cut that will be valid for three years, starting from the tax year 2022”.

“This is the second part of our programme that concerns attracting investments and businesses in Cyprus, a programme that seems to have strong results,” he added, explaining that such actions support the growth and competitiveness of businesses.

Petrides also referenced the tax scheme approved on May 10, part of the first part of the government’s programme.

The first scheme provides tax cuts to foreign professionals and Cypriots who wish to relocate to Cyprus.

“Today, the Council of Ministers approved the second part of this programme, which concerns the granting of an increased discount of 20 per cent for research and development expenditures for tax purposes,” Petrides explained.

“In essence, an increased discount for tax purposes is granted by 20 per cent to legal entities and individuals whose projects allocate funds for research and development,” he added.

Petrides pointed out that the European Commission in its recent report on Cyprus stated that the export of services to Cyprus, despite the blow to tourism, especially by high-tech companies and professional companies, helped greatly in the economic development of the country.

“With these programmes, which are part of the long-term framework of a new development model of Cyprus, we believe that we will have tangible results,” the minister said.

“This way, Cyprus can become a technology destination, and we are moving in this direction,” he concluded.