Cyprus launches public consultation on aligning minimum tax rules for large businesses with EU Pillar Two framework
Cyprus has opened a public consultation on proposed amendments to its minimum tax legislation for large multinational and domestic business groups. The changes aim to fully align national law with EU and international standards, specifically the global minimum tax framework known as Pillar Two. Key provisions include introducing a qualified domestic minimum top-up tax (QDMTT) effective January 1, 2026, to ensure a minimum effective tax rate of 15% for groups with revenues exceeding €750 million.
The QDMTT will allow Cyprus to collect additional tax to bring qualifying entities’ effective tax rate to the minimum threshold, applying priority over other international tax rules. Certain entities, including investment and insurance investment entities, are excluded. The amendments include detailed provisions on tax calculation, transitional arrangements, and mechanisms to prevent double taxation.
This consultation responds to findings from the European Commission and aims to ensure Cyprus’s compliance ahead of an international assessment scheduled for autumn 2026. The proposals also incorporate OECD guidance and recommendations to prepare Cyprus for upcoming reviews, ensuring large groups in Cyprus meet the new tax standards under a clearer domestic framework.
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