Draft legislation would introduce IIR and UTPR for MNEs, and harmonize the tax framework with EU directive
The Ministry of Finance issued draft legislation (“The Safeguarding of a Global Minimum Level of Taxation of Multinational Enterprise Groups and Large-Scale Domestic Groups in the Union Law of 2023") implementing the EU Minimum Tax Directive.
The draft legislation would introduce an income inclusion rule (IIR) and undertaxed profit rule (UTPR) for large multinational enterprises (MNEs) and domestic groups with annual consolidated revenues exceeding €750 million and harmonize the Cyprus tax framework with the EU directive. The legislation would not amend the Cyprus income tax law but would introduce an additional set of tax rules to be applied alongside the application of the corporate income tax and other relevant taxes for MNEs in scope.
Read a March 2024 report prepared by the KPMG member firm in Cyprus