Tax Saving Corporation – Client-Information

Information regarding the current situation in Cyprus

The session of the Parliament for discussion about the draft bill for the stability levy has been postponed to today at 18:00 local time.

In the meantime a lot of variations about the way the levy, that has been introduced by the Eurogroup, will apply have seen the lights of publicity, including scenarios for a levy of:

a)            3% on amounts up to EUR 100,000, increasing to 10% on the next EUR 400,000 and ending up to 15% on amounts above the level of EUR 500,000 OR

b)           exemption on the first EUR 20,000, with the rates remaining the same as originally proposed and included in the bill thereafter, i.e. 6.75% up to EUR 100,000 and 9.99% thereafter OR

c)            exemption on the first EUR 100,000 (something which is in line with the relevant local and EU legislation and which seems to be the option gaining momentum both locally and at EU levels) with any amounts beyond that level to be levied a percentage which it is not known so far.

We should stress, however, that no matter whichever scenario will be put for discussion and voting in the Parliament this afternoon, based on the information currently available the most probable (or even almost certain) outcome is that the bill will be rejected.

The President of the Republic has already communicated with EU officials to inform them about the likely outcome of the forthcoming Parliamentary session and has asked for their support in finalizing the financial programme without a stability levy, siding also the overall damage to the Euro and the Eurozone and the EU in general from such a measure, as indicated by the performance of the financial markets around the world yesterday.

The government is already examining alternatives which could produce an amount equal or even higher than the EUR5.8bln that the above measure is expected to generate.

The CentralBank of Cyprus has announced that the banks and other financing institutions will remain closed both today and tomorrow with the possibility of this bank holiday to be extended until next Tuesday (Monday is a public holiday in Cyprus)  having very good chances of occurring.

We will try our best to keep you up to date.
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