Cypus new legislation for incentives on prompt settlement of outstanding tax liabilities

On 24 November 2011, the Cyprus Parliament voted on a new law which provides for incentives on prompt settlement of outstanding tax liabilities.

The incentives are given in the form of a waiver of all penalties and interest for outstanding tax obligations for all years up to and including 2008.

The new law provides that taxpayers who have outstanding tax liabilities for the above period are entitled to pay the principal amount of tax due plus a penalty of 5%. Upon payment, any additional interest or other penalties that were imposed as a result of non timely payment are written off.

The incentive scheme will remain in force until 30 March 2012.