There is no evidence or indication that international and multinational companies are leaving Cyprus due to the imposition of the 15% minimum tax rate.
He emphasized this at an emergency press conference he convened to respond to media reports and rumors regarding companies leaving the country and pressure from the European Union on Cyprus, noting that company registrations in the country are continuing at an increased rate.
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People are lining up at gas stations with 20 euros
Mr. Keravnos assessed that these specific statements are based on isolated voices and did not rule out the possibility that they serve “interests” or stem from “obsessions.” When asked if he had specific individuals or entities in mind, he replied, “Let those who understand, understand.”
Which companies are affected by the 15% rate?
Mr. Keravnos clarified that the 15% minimum tax does not apply to all businesses operating in Cyprus.
As he explained, the legislative framework being proposed relates to Pillar 2 of the international agreement on global minimum taxation and applies to multinational companies with an annual turnover exceeding €750 million.
At the same time, he clarified that a company’s inclusion in this framework does not automatically mean it will be required to pay additional tax.
If a 12.5% tax rate applies, an additional tax liability may arise under Pillar 2 rules in order to reach the minimum rate of 15%.
The Minister linked this provision to the international agreement on a global minimum tax, which has been incorporated into the European institutional framework.
Over 2,000 parent companies
Mr. Keravnos made special mention of the presence of multinational corporations in Cyprus, noting that the number of parent companies exceeds 2,000.
According to the Minister, there is currently neither information nor any indication pointing to a mass or individual exodus of companies due to taxation.
“We have a competitive tax environment,” he emphasized, while also highlighting Cyprus’s geographic location and other advantages that, as he said, continue to make the country an attractive destination for business activity.
In fact, when asked if there are already specific instances of companies leaving Cyprus, the Minister replied that the opposite is true: “The only trend we’re seeing is that company registrations in Cyprus are on the rise.”
Referring to the countries that have secured an extension for implementing the framework, he noted that, according to the information he has, these are countries with a small number of multinational companies—fewer than 12—while by 2029, the system’s implementation is expected to be extended to all countries.
Inflation at 3.5%
The Minister of Finance also referred to inflation data, seeking to distinguish between the national index and the harmonized consumer price index.
As he noted, the rate announced today stands at 3.5%, while the 5.2% discussed the previous day refers to the harmonized index.
The situation in Cyprus, according to Mr. Keravnos, remains manageable, with the high fluctuation in the harmonized index largely linked to prices in the restaurants and lodging category.
This category recorded a 13% increase in August, a trend the Minister attributed to seasonal factors and heavy tourist traffic.
As he noted, during the summer months, increased tourist spending affects the index, while this specific impact is expected to subside in the coming months.
Mr. Keravnos also noted that inflationary pressures remain lower than previously estimated, even at inflation levels around 4%.
Rise in Unemployment Is “Temporary”
Regarding the rise in unemployment to 7.2%, the Minister of Finance argued that the data are influenced by specific sectors and do not reflect the broader situation in the labor market.
Specifically, he attributed the increase to public administration, education, and administrative activities, where a significant number of workers are employed on a contract basis.
Consequently, he characterized the rise as temporary and not indicative of a widespread deterioration in employment.
Unemployment, according to him, remains at normal levels, while the Cypriot economy continues to operate under conditions of full employment.
“Cyprus is not facing a dead end,” Makis Keravnos stated emphatically, emphasizing that the government continues to protect the interests of the economy and the country.
*Source: boussiasnews.cy
