On the 28th day of June 2010 the European Commission publicized the 2010 edition of Eurostat’s annual report on taxation trends within the European Union, whereby it is shown, as per the European Commission, that the global economic crisis has produced some reductions in taxes in Europe.
This report contains a detailed statistical and economic analysis of the tax systems of the Member States of the European Union, plus Iceland and Norway, which are Members of the European Economic Area. The data are presented within a unified statistical framework, which makes it possible to assess the heterogeneous national tax systems on a fully comparable basis.
According to the report, the average corporate tax rate in the European Union is now 23.2% with the Cyprus corporate rate being only 10%, the lowest in the EU. The report also noted the amendments to the Special Contribution for Defence Law and Income Tax Law made in October 2009, which offer new advantages for collective investment schemes and reduce the tax burden on interest.
The Eurostat report underlines Cyprus’s competitiveness as a low-tax economy. Taking into account Cyprus’s wide range of double tax treaties and its new tonnage tax regime for shipping and ship-management activities, it is easy to see why Cyprus has become the natural portal for investment into the EU.