Cyprus FinMin says G7 tax stance may not directly affect it

A decision by the Group of Seven to impose a global minimum tax rate does not seem to directly affect Cyprus, its Finance Minister Constantinos Petrides said on Monday.

In a written comment to Reuters, Petrides said Cyprus would safeguard its interests and that those of smaller EU member states needed to be acknowledged and taken into consideration.

The G7 has proposed a global minimum tax rate of 15 percent.

Cyprus’ tax rate is 12.5 percent, but Petrides said its effective taxation was higher than 15 percent.

“The G7 decision is indeed a breakthrough, which however does not seem to directly affect Cyprus,” Petrides said, adding that the island was “not a tax haven.”

“Cyprus is an open economy and a competitive destination, based on its own merits, and will exhibit a constructive spirit at the discussions at EU level,” he said.

“At the same time [it] will safeguard its interests and the sustainability of the economy. The small EU member states’ interests should be acknowledged and taken into consideration.”

Petrides had told European lawmakers last week that the island believed taxation was a matter of national competence.

Cyprus was last forced to review its tax regime in 2013 when it raised the threshold to 12.5 percent from 10 percent under terms of an international financial bailout. [AP]