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Starting January 1, 2025, Cyprus is increasing interest rates related to arrears and court cases, which could affect anyone with overdue debts to the state or those involved in legal disputes. The Finance Minister, Makis Keravnos, announced on Monday that the public interest rate for arrears will rise to 5.5%, while the court interest rate will jump to 6%.
So, what exactly does this mean for you?
The public interest rate for arrears is the amount the government charges when a debt is overdue, like taxes or other payments owed to the state. If you owe the government money and miss the deadline, you’ll be charged 5.5% interest on that amount starting next year. This is an increase from the 5% rate set for 2024, meaning it’ll cost you a bit more if you don’t pay up on time.
At the same time, the court interest rate, which applies to judgments awarded in legal disputes, will also go up. If you win a case and are awarded money, the interest rate on that amount will now be 6%, up from 5.5% in 2024. This means the money you’re entitled to collect will grow a little faster after the judgment, thanks to the higher rate.
For those wondering why these changes are happening, the public interest rate is essentially how much the state charges when someone fails to pay their debts on time. Meanwhile, the court rate reflects the interest added to a court-ordered amount, encouraging faster settlements in legal disputes.
Both of these new rates will be in effect through 2025, meaning Cyprus is hoping to keep pace with inflation and the overall economic climate by adjusting these numbers.
Whether you’re a taxpayer, business owner, or involved in legal matters, these changes are something to watch closely. They might not be huge, but they will have an impact on how much you owe or can collect starting in the new year.
So, if you have any overdue payments, now might be a good time to settle up before the interest rate increases!
With information from CNA
