Cyprus in International Tax Planning
Prior to its accession to the European Union on May 01, 2004, Cyprus has reformed its tax system by removing the label of an offshore centre and a tax haven. Cyprus prides itself as an international financial centre fully compliant with EU laws and Directives, the Code of Conduct of the OECD on harmful tax practices. The new tax regime which became effective from 1 January 2013, provides for a 12,5% Corporation tax for all companies registered in Cyprus, which is the lowest in the European Union. This regime, coupled with an extensive network of favorable double tax treaties, enabled Cyprus to develop into one of the most successful International, financial and commercial centres in Europe.
Banks that will fail to comply with the Euro-FATCA standard will be banned from operations in the EU, including opening of correspondent accounts in any European banks and payments in Euro.
US authorities are determined to influence the offshore schemes actively used by (inter alia) the US high-tech companies. Thus, Apple increased its offshore savings by 5.7 times in the period of 2010–2014, while Microsoft did over 3 times.