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Cyprus Government Unveils Landmark Tax Reform Initiative

by THEFUTURE.TEAM

October 31, 2025

The Cyprus Council of Ministers has approved the government’s comprehensive proposal for tax reform, a move deemed an “emblematic project” by Finance Minister Makis Keravnos. Now set for parliamentary debate and approval, this reform marks the first major overhaul in 22 years.

Enhancing Social Equity and Economic Growth

At its core, the reform is structured to redistribute the tax burden more fairly, reinforce the middle class and low-income households, and spur growth among small and medium enterprises, which constitute 98% of the national economy. The package includes six legislative amendments aimed at a broad social impact. Notably, the tax-free allowance will rise from €19,500 to €20,500, placing it among the highest in the European Union.

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Targeted Relief for Families and Key Demographics

Designed with a keen social perspective, the reform introduces significant relief measures for families, students, young citizens, and large families. For household incomes below €80,000 (extended to €100,000 for large families), the measures include:

An entitlement of €1,000 tax reduction per child.
A €2,000 benefit per child for single-parent households.
A €1,000 discount for each student.
A €1,500 reduction applicable to home loan interest or primary residence rent.
A €1,000 credit for energy upgrades or the purchase of an electric vehicle.

According to Minister Keravnos, these adjustments are expected to result in 55% of employees being exempt from taxation, with numerous cases exceeding a tax-free threshold of €24,500.

Reforming Corporate Tax Measures

The reform introduces several pivotal changes that directly affect business operations:

The elimination of assessed dividend distribution for profits as of January 1, 2026.
A reduction in the extraordinary defense contribution on actual dividend distribution from 17% to 5%.
The removal of rental income contributions.
An increase in the corporate tax rate from 12.5% to 15%.
The introduction of an 8% rate for gains from the disposal of crypto-assets.
An extension of loss carryforwards from 5 to 7 years.

Minister Keravnos emphasized that the reform is fiscally neutral and is intended to promote a fair redistribution of resources among employees, businesses, and households.

Refinements Following Stakeholder Consultations

Significant enhancements emerged from discussions with social partners:

The allowance for voluntary exemption has surged from €20,000 to €200,000.
The proposed property and business levies have been temporarily shelved.
For Non-Dom companies, the fee is reduced from €250,000 to €50,000 for a period of five years, maintaining incentives to attract foreign investments.

Strengthening Anti-Evasion Measures

The initiative establishes robust mechanisms to combat tax evasion. Companies identified with irregularities will receive three warnings. Should issues recur within 30 days, cases will be escalated to the judiciary, which may impose temporary closures or other sanctions.

Timeline and Legislative Endorsement

Minister Keravnos has called upon the Parliament to approve the reform before the end of 2025, ensuring implementation by January 1, 2026. “This tax reform will significantly boost the economy and provide relief to hundreds of thousands of workers and households,” he stated, expressing optimism for the package’s timely passage.

The Future Forbes Realty Global Properties

by News Editor

August 24, 2026

Courts Are Still Applying Old Copyright Rules To AI

AI companies train models on enormous amounts of published material, including books, articles and academic research. Whether using that content without authors’ permission violates copyright law remains unresolved.

Much of the debate centres on fair use, which allows copyrighted material to be used without permission in certain circumstances. Courts consider factors such as the purpose of the use, how much material was involved and its impact on the original market.

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Anthropic Case Sets An Important Precedent

A major case involving Anthropic and a group of authors provided one of the clearest rulings so far. Judge William Alsup found that using copyrighted books to train AI models was lawful, comparing the process to people reading and studying literature before creating something new.

Anthropic was nevertheless ordered to pay $1.5 billion in a settlement. The penalty concerned books the company had obtained from illegal online libraries rather than the AI training itself.

For AI companies, that distinction could prove significant because it separates studying copyrighted material from directly copying it.

Competition Could Be The Key Issue

A case involving Thomson Reuters and Ross Intelligence offers a different perspective. A court ruled that Ross could not claim fair use after using Reuters’ copyrighted material to develop a competing AI-powered legal research platform.

The decision suggests courts may be less willing to consider AI training fair use when copyrighted content is used to build a product that directly competes with the original.

For authors, an unresolved question is whether AI-generated content should be considered competition for the works used to train these models.

The Law Has Yet To Catch Up

US copyright law predates generative AI by decades, leaving courts to apply old principles to new technology. Questions also remain over copyright protection for AI-generated works. In Thaler v. Perlmutter, a court ruled that material created entirely by AI cannot receive copyright protection.

Major AI companies remain involved in copyright litigation, and different courts could reach different conclusions. For now, there is no universal rule: the legality of AI training will depend on the circumstances of each case and how courts ultimately interpret copyright and fair use.