The Cyprus government announced, on 21 February, the abolition of the €350 Annual Levy payable by all registered entities in Cyprus to the Registrar of Companies & Intellectual Property as part of a €60 million package of targeted supportive measures for the economy.
The €350 levy was introduced in 2011 as part of fiscal consolidation measures implemented after the economic crisis. It has been much criticised as unfair for impacting small and medium-sized enterprises (SMEs) disproportionately.
According to recent figures presented in Parliament, a significant number of companies, many of which are dormant, owe the state treasury a total of around €30 million due to their failure to comply with this obligation in previous years.
Companies that have not yet paid the Annual Levy for any year from 2011 to 2023, will have to proceed with its payment, including applicable penalties:
- 10% on the initial amount due (€35), if not paid within two months from the due date of 30 June of each applicable year.
- 30% on the initial amount due (€105), if not paid within three months from the imposition of the first penalty of each applicable year, raising the total amount payable to €490.
The decision was approved by the House of Representatives on 29 February. Companies that have already paid the Annual Levy for 2024 will be subject to a refund.
The move underlines the government's aim to create a more favourable business environment in Cyprus to foster long-term growth and stability.
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