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Cyprus Implements EU-Mandated 15% Tax Rate On Large Multinationals

by THEFUTURE.TEAM

August 27, 2024

Cyprus is set to introduce a 15% minimum tax rate for large multinational corporations, in compliance with the EU directive aimed at harmonising tax policies across member states. The move, endorsed by Cyprus’ Finance Minister Makis Keravnos, is expected to generate over €200 million in additional revenue. This decision, while marking a significant shift from the current 12.5% rate, aligns Cyprus with the broader OECD-led initiative to establish a global minimum tax rate. Despite concerns, Keravnos reassured that the change is unlikely to drive multinationals out of the country, as the directive applies EU-wide.

This adjustment reflects a crucial step in Cyprus’ ongoing efforts to maintain competitiveness while adhering to international tax standards. With the proposal now before the Cabinet and soon to be discussed in Parliament, the nation is poised to balance its attractive tax regime with the demands of a globalised economy.

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The introduction of this tax rate signals Cyprus’ commitment to international cooperation on tax matters, aiming to prevent profit-shifting practices that have historically allowed large corporations to minimise tax liabilities. For Cyprus, a key hub for multinational firms, this move could redefine its positioning in the global business landscape, ensuring it remains a compliant yet competitive destination for international business.

While the increase may seem minor, the 15% rate represents a broader shift in global tax policy, driven by a collective effort to create a more level playing field for taxation. For Cyprus, traditionally seen as a tax-friendly jurisdiction, this could challenge its status, pushing it to leverage other competitive advantages beyond low tax rates, such as a robust legal framework, strategic location, and skilled workforce. The long-term impact on foreign direct investment will be a critical metric to watch as this policy unfolds.

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Cyprus Tourism Rebounds In Summer After Sharp Spring Decline

by THEFUTURE.TEAM

September 8, 2026

Cyprus tourism recovered during the peak summer season, narrowing the gap with 2025’s record performance after a sharp downturn in March and April, according to Eurobank Research.

Summer Demand Recovered After Spring Shock

Tourist arrivals in July were 1.1% below July 2025, improving from a 1.7% decline in June and sharp drops of 30.7% in March and 27.6% in April. The recovery followed renewed instability in the Middle East and disruption to air travel earlier in the year, which weakened visitor flows.

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Air Connectivity Held Firm

Passenger traffic at Cyprus airports fell 3.7% in the first seven months, while commercial flights declined only 0.9%. The gap suggests airlines largely maintained routes and capacity, with weaker passenger numbers reflecting lower demand and load factors rather than widespread cancellations.

Source Markets Show Uneven Recovery

Arrivals from January to July remained 8% below the same period in 2025, representing about 193,000 fewer visitors. Israel was the strongest major source market, with arrivals up 8.6% and contributing about 25,000 additional visitors, while the UK, Cyprus’ largest source market, fell 11.1%, accounting for roughly 90,000 of the overall decline.

Poland was broadly stable, while Germany, Greece and Scandinavian markets recorded more moderate declines. Eurobank Research said the figures point to a temporary demand shock rather than a structural deterioration in Cyprus’ tourism connectivity.

Hotels Recover Ground After A Difficult Spring

The summer recovery also supported aviation, transport, retail and food services. Government spokesman Konstantinos Letymbiotis said tourism had remained resilient, with first-half arrivals still slightly above the same period of 2024, previously a record year.

“From May onwards, the picture has been steadily improving and the gap from the 2025 record has been narrowing significantly,” Letymbiotis said. He also said June recorded 489,965 arrivals, just 1.7% below June 2025, while tourism revenue reached €423.1 million, up 0.2% year on year.

Cyprus Hotel Association director-general Christos Angelides said the industry hoped to limit 2026 losses to around 10%. He said June brought a meaningful recovery, while July and August performed at satisfactory levels despite earlier cancellations, with September occupancy running at around 75% to 80%.

Cyprus Recorded EU’s Sharpest Overnight Stay Decline

Eurostat data shows the depth of the disruption, with Cyprus recording the EU’s largest decline in tourist accommodation overnight stays in the first half of 2026. Overnight stays fell 7.7% year on year, while non-residents accounted for 92.6% of all overnight stays, second only to Malta at 95.2%.

Outlook Remains Cautiously Positive

Eurobank Research estimates that 2026 arrivals could reach about 4.32 million if August-to-December figures are around 1% below 2025. That would be 4.7% below last year’s record of 4.53 million but 6.9% above 2024; under a more cautious scenario, the total would reach about 4.27 million.

Both scenarios point to normalization after an exceptional 2025 rather than a deeper structural decline. The near-term outlook remains linked to regional stability, travel guidance and visitor confidence.

Diversification Becomes More Important

The 2026 experience also highlights the importance of diversifying source markets. A late-August report by TOURISE and Oxford Economics identified Cyprus as an example of how alternative markets can help offset major disruptions.

Russia accounted for more than 27% of Cyprus’ tourist arrivals before 2022, but its share fell to 1% by 2025 following Russia’s invasion of Ukraine and subsequent sanctions. Cyprus expanded into European markets, with Poland’s share rising from 2% before the crisis to 9% in 2025, alongside stronger demand from Central Europe and the Nordic countries.

Eurobank Research said the uneven performance in 2026 reinforces the need to broaden access to continental European markets and strengthen shoulder-season demand.