The 8th Cyprus International Tax Conference kicked off on Tuesday morning with discussions centred on the country’s tax system reform, the digitalisation of tax administration, and the need to maintain the competitiveness of the Cypriot economy.

The event featured key figures from the tax and financial sectors, who emphasised the importance of a modernised and efficient tax framework.

Kyriakos Iordanou, general manager of the Institute of Certified Public Accountants of Cyprus (Selk), stressed that, after years of anticipation, there is now a concrete plan for tax reform.

“This plan serves as the starting point for a constructive dialogue among stakeholders,” he said.

He underscored the pivotal role of taxation in economic stability, particularly in times of uncertainty.

The success of this reform, he said, would be “instrumental in achieving the objectives set out in the country’s national long-term strategy for sustainable development (Vision 2035)”, reinforcing the overall economic landscape.

On his part, tax commissioner Sotiris Markides highlighted the transformation of the tax department into a modern, efficient, and taxpayer-friendly institution.

In addition, he explained that the strategy aims to “ensure tax fairness and improve compliance“.

Markides said that, since 2022, the department has accelerated the clearing of outstanding tax obligations and has already commenced processing returns for 2023.

He pointed out that tax revenues for 2024 exceeded €7 billion, marking an increase of nearly 50 per cent compared to previous years.

Moreover, the digitalisation of tax administration through the Tax For All (TFA) platform has “significantly streamlined processes”, facilitating the return of over €1 billion to businesses.

He further mentioned the establishment of a tax dispute resolution committee, which will provide taxpayers with the option to challenge tax authority decisions without immediate recourse to the courts.

“The objective is transparency, accountability, and fairness in taxation,” he stated.

Elsewhere, Selk president Nikos Chimarides said that Cyprus has the potential to become one of the most successful small economies globally.

He asserted that tax reform is “crucial to enhancing economic resilience and competitiveness“.

Furthermore, Chimarides stated that “Cyprus remains an attractive destination for corporate headquarters relocation, thanks to its competitive tax regime”.

He pointed out that the current system offers a low corporate tax rate, extensive double taxation treaties, and favourable dividend tax provisions.

However, he warned of the possible negative impact of a proposed increase in corporate tax from 12.5 per cent to 15 per cent, describing it as a 20 per cent hike at a time when other countries are striving to improve their competitiveness.

Selk, he said, has submitted proposals aimed at maintaining fiscal stability without undermining the country’s attractive tax environment.

What is more, the Selk president said that tax reform should be urgently implemented so that “the country can focus on other critical areas, such as human capital development and reducing bureaucracy“.

Meanwhile, the conference’s opening speeches focused on the significance of tax reform for Cyprus’ economy, highlighting the need to balance fiscal stability with competitiveness.

They also stressed that the proposed measures for modernisation, transparency, and efficiency align with Cyprus’ development strategy, which aims to drive the country’s long-term economic growth.