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17 July, 2024
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Cabinet approves tax deductions for businesses and extends tax payment deadline

Measures were passed today to support businesses through tax deductions and extended payment deadlines

Newsroom / CNA

The Cabinet approved several important measures on Wednesday, including a bill on tax rebates for businesses for energy upgrades, an extension of the tax payment deadline, and a suspension of the obligation to file tax returns for individuals with a taxable income below €19,500.

According to Finance Minister Makis Kerynos, the Council of Ministers approved the proposal by the Ministry of Finance regarding a bill aimed at diversifying the income tax and promoting green initiatives. The bill allows for tax deductions on capital expenditures related to energy upgrades and savings by businesses, reducing operating costs while fostering a green economy—a key government objective.

Under the new bill, there will be an increased capital rebate of 7% for improving the energy efficiency of buildings, compared to the previous 3% rate. Investments in machinery and equipment linked to renewable energy systems, as well as technical systems to enhance energy efficiency, will receive an increased capital rebate of 20%. Moreover, new electric commercial vehicles, taxis, and buses will enjoy an increased capital rebate of 25%.

The bill also clarifies that expenses incurred for energy upgrade studies or the issuance of energy-saving certificates for businesses are deductible from taxable income. Minister Kerynos emphasized the significance of this decision, highlighting its role in encouraging businesses to modernize their energy utilization and contribute to the green economy.

Another decision made by the Cabinet involves the extension of the tax filing deadline for 2022. The payment deadline has been extended until October 2, 2023. This extension allows sufficient time for the passage of relevant legislation in the House of Representatives, particularly regarding the exemption of remuneration for first employment in the Republic for the tax year 2022. Once this legislation is finalized in the coming weeks, taxpayers can submit their applications with the necessary amendments.

Additionally, the Cabinet has suspended the obligation to file a tax return for individuals with a taxable income below €19,500 for another year. Minister Kerynos explained that this measure aims to prevent a surge of tax returns during the testing phase of the new tax system. The suspension will enable the system to process these applications smoothly and efficiently.

Cyprus  |  economy  |  tax

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