Once tax reform has been fully completed, the Cypriot government intends to explore the possibility of introducing a tax on properties worth more than €3 million. This announcement was made by Finance Minister Makis Keravnos while addressing the Parliamentary Finance Committee. The discussion was prompted by an initiative from the AKEL party, which proposed a tax on property owners with assets totalling more than €3 million. A similar idea was previously put forward by the Center for Economic Research, but it has not yet been included in the current reform package.
The minister recalled that the property tax had been abolished several years ago and that the issue would now be studied comprehensively, including the possibility of transferring the authority to administer it to local authorities.
Corporate fees and the burden on business
A proposal to introduce graduated corporate contributions, also recommended by the Center for Economic Research, was discussed separately. According to Keravnos, the current phase of profound tax changes is not the right time to introduce additional fees, as this could put unnecessary pressure on businesses.
Taxation of Professional Provision Funds
Keravnos also commented on the taxation of the investment activities of Professional Provision Funds. According to the State Aid Commissioner, exempting these transactions from tax could constitute state aid. This would mean that the European Union would demand explanations from Cyprus, especially if there were signs of an impact on competition.
The future of cryptocurrency tax
The minister also touched on the topic of cryptocurrencies. He noted that the discussion should focus less on increasing the tax rate — from the proposed 8% to a possible 15% — and more on identifying and tracking digital assets. According to him, controlling such transactions poses a serious challenge.
Meanwhile, the EU is preparing a single regulation on crypto assets, which Cyprus will be required to implement once adopted. This document is expected to come into force in the near future and should improve monitoring mechanisms and increase transparency within the EU's crypto sector.