The Cyprus government has announced its intention to improve the liquidity of the national financial system by introducing a tax amnesty encouraging taxpayers to repatriate funds hidden overseas.

Although no details have been announced the government has indicated that if previously undeclared funds hidden abroad are repatriated and deposited with a national bank for a period of at least five years or are used to purchase Cyprus government bonds, any income taxes owed in respect of the repatriated funds will be waived.

The government intends to put the draft law before the House of Representatives by early August and, if it is approved, for the amnesty to take effect immediately and last until the end of 2013.

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