Cyprus has been removed from the so-called “blacklist” published by the Portuguese tax authorities. Decree 150/2004 of the Portuguese Ministry of Finance set out a list of more than 80 jurisdictions considered to have unduly favourable tax regimes. Residents of countries on the list are denied certain benefits of the Portuguese tax system, and subject to higher rates of certain taxes. Companies resident in the countries on the list are subject to the Portuguese CFC rules, with significant Portuguese shareholders being liable to Portuguese tax on undistributed profits attributable to them.
As Cyprus and Portugal are fully compliant with the relevant EU Directives, particularly Directive 77/799/EEC concerning mutual assistance by the competent authorities of the Member States of the EU in the field of direct taxation and taxation of insurance premiums and Directive 2008/55/EC on mutual assistance by the EU Member States for the recovery of claims relating to certain levies, duties, taxes and other measures, Cyprus has now been removed from the list of “suspect” jurisdictions and Cyprus-resident companies and individuals will no longer be subject to unfavourable treatment.