2. Retention of Benefits for Cyprus Tax Residents:
- Taxation of worldwide income with exceptions/deductions.
- Deduction of expenses for generating taxable income.
- Notional Interest Deduction (NID).
- Shipping regime and a 50% tax exemption for first-time employment in the Republic.
- Tax Exemption on the profit from the sale of securities
3. Revision of Tax Residency Criteria for Companies:
- Strengthening the tax residency criteria for companies based on control and management.
- Implementation of a framework for intangible assets (IP Box).
4. Abolition of Deemed Dividend Distribution:
- Complete abolition of the deemed dividend distribution regime.
- Implementation of a 5% withholding tax on actual dividend distributions for Cyprus tax residents who are also domiciled in Cyprus.
- Introduction of an anti-avoidance clause, imposing a higher withholding tax rate than 5% for disguised dividend distributions (Estonian model).
5. Increase in Corporate Tax:
- Increase in the corporate tax rate from 12.5% to 15%.
6. Measures Against "Closely Held Companies":
- Ability to lift corporate veil and tax shareholders as individuals conducting business.
- Ability to adjust salaries to reflect market rates.
7. Strategy for Green Transition and Digital Transformation:
- Proposals for super deductions for expenses/depreciation, accelerated depreciation, and deductions for skill upgrades and employee retraining.
- Losses from these measures can be carried forward without restrictions.
8. Strengthening Tax Residency Criteria for Individuals:
- Retention of the 183-day rule and strengthening of the 60-day rule.
- Expansion of the definition to include individuals with a business center of activity in Cyprus (based on the French model).
- Resolution of dual tax residency issues according to the Double Taxation Avoidance Agreement.
9. Non-Domiciled (Non-Dom) Regime:
- Retention of the non-dom regime with extensions and the imposition of an annual fee.
