Cypriot GMT Law Tabled in Parliament Includes Detailed QDMTT Provisions

On October 3, 2023, the Cyprus Ministry of Finance issued the ‘Ensuring a Global Minimum Level of Taxation of Multinational Enterprise Groups and Large-Scale Domestic Groups in the Union Law of 2023’ (the ‘draft law) to implement the Pillar Two GloBE rules/EU Minimum Tax Directive. It was open for consultation until October 31, 2023. On October 18, 2024, the draft law was tabled in Parliament  See: Cyprus GMT Law October 2024.

As provided in the EU Directive, the draft law includes an income inclusion rule (IIR) and an under-taxed profits rule (UTPR).

The IIR is to apply to financial years beginning on or after December 31, 2023. The UTPR will generally apply to financial years beginning on or after December 31, 2024.

Section 12 of the draft law provides that Cyprus will apply a domestic minimum top-up tax. Section 61 of the draft law provides that this will apply to financial years beginning on or after December 31, 2024.

The latest draft law tabled in Parliament ties into the original draft law for consultation, however, it now includes additional rules for the operation of the Domestic Minimum Tax (intended to be a QDMTT).