“The government’s priority is to help the recovery of the economy by promoting growth, reducing unemployment and restoring the confidence of foreign investors in order to increase the competitiveness of Cyprus and create a more efficient and business-friendly environment,” Anastasiades said. Under the new incentives, he said, companies would receive a 25 per cent tax break when they employed additional personnel. They would be granted a deduction of 100 per cent until 2016 on expenses used for the acquisition of fixed assets related to innovation, research, computing, communications and renewable energy. There would also be an extension until 2016 for increased tax deductions of at least 20 per cent for the acquisition of other assets, he said.

Anastasiades also revealed that within the next few days more tax incentives would be announced for those affected by the resolution of Laiki Bank and the administration of Bank of Cyprus. He added that a scheme had been put in place not to charge interest to those companies which were unable to pay VAT for April, May and June due to the banking crisis. The ten per cent VAT charge would also be reduced to 5 per cent for the period July until October as long as they are paid in full by December, he said. “Despite the current difficulties Cyprus has more than fifty double taxation agreements in place, it has an exceptional level of professionalism, providing accounting, legal and financial services and a high level of manpower,” Anastasiades said.

The president added Cyprus also has one of the lowest corporate tax rates in Europe and remained an attractive destination for foreign investors and a highly competitive centre for international business. “In combination with the measures which have been announced we have introduced ways to modernise the state by simplifying procedures in the public sector with a view to permanently removing the obstructive red tape which does not help growth,” he said. Anastasiades said he hoped to strengthen and modernise the public service through training, meritocracy and the use of new technology.

Source: Cyprus Mail