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Cyprus Embraces Tax Reforms, Yet Enforcement Improvements Remain Critical

by THEFUTURE.TEAM

September 19, 2025

Cyprus has emerged as a focal point in Europe’s evolving tax policy debate following a strategic two-day visit by the European Parliament’s Subcommittee on Tax Matters (FISC). High-level discussions with key government figures and industry leaders underscored both positive reforms and ongoing challenges in regulatory enforcement.

European Scrutiny and Strategic Engagement

During their visit on September 16 and 17, the FISC delegation met with House Speaker Annita Demetriou, members of the finance committee, and senior officials, including the Assistant Tax Commissioner. Interactions with prominent business associations—including the Cyprus Chamber of Commerce and Industry, the Employers and Industrialists Federation, the Institute of Certified Public Accountants of Cyprus, and the Cyprus Bar Association—highlighted the depth of the dialogue on reform and accountability.

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Prioritizing Tax Evasion Prevention and Competitiveness

The delegation, led by Danish MEP Kira Marie Peter-Hansen, commended Cyprus for its recent efforts to align with European standards by dismantling complex corporate structures prone to tax evasion. However, Peter-Hansen emphasized that without robust resource allocation for enforcement, legislative changes alone are insufficient. She noted serious concerns regarding the potential misuse of tax residency rules and the golden visa scheme, reaffirming the need for a balanced approach that attracts investment while curtailing financial malpractices.

Legislative Reforms Aligned With EU Directives

Cypriot MEP Michalis Hadjipantelas has pushed for reforms aimed at simplifying the EU tax framework, particularly to ease the burden on small and medium-sized enterprises. He stressed that streamlining compliance and reducing bureaucracy are critical to enhancing competitiveness. Similarly, Christiana Erotokritou, President of the House Finance Committee, reiterated that Cyprus remains fully aligned with EU directives on tax evasion and anti-money laundering, while also addressing broader socioeconomic challenges, including affordable housing and high energy costs.

Future Outlook: Collaborative European Integration

Looking forward, Cyprus is poised to build on its recent reforms as it prepares for its EU Council Presidency. The FISC delegation expressed optimism about the country’s commitment to ongoing adjustments and sanctions that fully meet EU rules. With discussions already underway on critical topics such as green taxation and tobacco regulation, Cyprus has the opportunity to position itself as a transparent, competitive, and responsible hub for business and investment in Europe.

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Only 1% Of Cyprus Farms Use Precision Farming Technologies

Cyprus remains one of the European Union’s least digitised agricultural economies, with just 1% of farms using precision farming technologies in 2023, according to Eurostat.

The findings come as the EU continues to encourage the adoption of digital tools aimed at improving agricultural productivity, efficiency and sustainability.

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Internet Access Expands, But Digital Uptake Lags

Internet access has improved across the bloc, although adoption remains uneven. Eurostat found that 43% of EU farms had internet access in 2023, with northern and central European countries leading the way.

Denmark, Germany, Slovakia, Latvia, the Czech Republic and Austria all reported internet access rates above 90%.

Greater connectivity, however, has not translated into widespread digital adoption. Farm management information systems, which help farmers manage day-to-day operations, were used by only about 11% of EU farms. France was a notable exception, with around 60% of farms using the technology.

Precision Farming Concentrated In Larger Operations

Robotics adoption also remained relatively limited, with only about 7% of EU farms using robotic technologies. Overall, around 18% of farms with utilised agricultural area employed at least one precision farming technology or practice in 2023.

These included robotics for plant protection, band spraying, variable-rate application, precision crop monitoring and soil analysis. Despite representing fewer than one in five farms, these holdings accounted for around 44% of the EU’s utilised agricultural area.

The figures suggest that precision farming remains concentrated among larger agricultural businesses, where investment in digital technologies is typically easier to support.

Cyprus Lags Behind EU Leaders

Luxembourg, Finland and Estonia recorded the highest shares of utilised agricultural area managed by farms using precision farming technologies, each exceeding 75%.

At the other end of the ranking, Cyprus recorded just 1%, while Greece and Romania reported between 10% and 15%. The results indicate that Cyprus remains at an early stage of digital adoption in agriculture, even as precision farming becomes more widespread across parts of the European Union.