EU warns Cyprus on business tax

The European Commission has warned Cyprus and several other EU member-states to step up their game on important new tax and data rules.

Cyprus, along with Spain, Latvia, Lithuania, Poland and Portugal, is under pressure to enforce a minimum 15% tax rate for big multinational companies, a key part of the European Union’s efforts to ensure fair taxation.

The EU directive which should have been implemented by the end of 2023 aims to stop large companies from dodging taxes by setting a baseline tax rate. While most EU countries have complied, Cyprus and the five others have lagged behind. They now have two months to get in line or risk being taken to the European Court of Justice, where they could face fines.

In addition to tax issues, the European Commission is also pushing Cyprus to improve corporate transparency. A rule requires multinational companies earning over 750 million euros to publicly disclose their income taxes to ensure they’re paying their fair share. Cyprus and five other countries haven’t fully adopted this rule yet, which the EU says is crucial for maintaining public trust in the tax system.