Cyprus government submits bill to align with EU 15% global minimum tax rules

The Cypriot government has submitted an amendment bill to the House of Representatives to fully align national legislation with the European Union directive regarding a 15% global minimum tax rate for multinational and large domestic groups. The proposed legislation, titled the 2026 Global Minimum Tax Law, targets entities with annual revenues exceeding €750 million, ensuring compliance with EU Directive 2022/2523 adopted in December 2022.

The legislative move follows concerns over the partial implementation of the directive in 2024. Failure to fully harmonize with the EU mandate carries significant risks, including potential financial sanctions from Brussels, legal infringement proceedings, and the risk that the OECD and third-party jurisdictions may not recognize the Cypriot tax framework. Such non-compliance could lead to double taxation for affected business groups.

While the Ministry of Finance maintains there is no concrete evidence of mass corporate departures, some stakeholders have expressed concern that the tax hike could prompt American multinational firms to relocate. The government is now pushing for the bill's passage to mitigate the threat of international tax complications and further European legal action.