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Cyprus Tax Compliance At Risk: Deadline Nears For 2024 Declarations

With the submission deadline for 2024 income tax declarations rapidly approaching, a significant number of Cyprus taxpayers remain non-compliant. Approximately 47,000 individuals have yet to fully execute their tax obligations, raising concerns as authorities enforce stringent filing protocols.

Overview Of Filing Compliance

Recent data from the Tax Department indicates that around 84% of taxpayers have definitively submitted their income declarations. In total, 269,737 taxpayers have completed the process—comprising 245,008 salaried individuals and 24,729 self-employed professionals. This marks a notable decrease compared to the 317,400 completed filings recorded in the previous tax year.

Analysis Of Submission Data

In addition to the definitive submissions, another 17,849 tax declarations—including 15,605 from salaried employees and 2,244 from the self-employed—are currently classified as provisional. Such provisional submissions imply that while the declarations have been processed, they have not yet been formally finalized. This classification leaves approximately 5,000 taxpayers vulnerable to a €100 fine should no corrective action be taken.

Strict Deadlines And Enforcement Measures

The final deadline for submission is set for Tuesday, September 30 at midnight, with no further extensions permitted. The Director of Taxation, Sotiris Markidis, has urged all taxpayers to adhere strictly to the established timelines. He emphasized that the five-month window provided has been ample for compliance. Taxpayers who submit their declarations after October will face statutory penalties, including the aforementioned €100 fine.

Implications Of Upcoming Tax Reforms

This filing period may represent the final instance for declarations based on the existing tax framework. Pending legislative reforms aim to overhaul the current system, with new regulations scheduled to take effect on January 1, 2026. These reforms will introduce significant changes, such as an increase in the tax-exempt threshold to €20,500 for all taxpayers and revised family-based tax relief measures. Enhancements include additional allowances for dependent children and special provisions for single-parent families. Taxpayers should note that these reforms will alter the landscape for the 2025 tax declarations.

In summary, as the deadline looms, both individual and business taxpayers must accelerate their compliance efforts to avoid penalties and adapt to an evolving tax environment.

Bank of Cyprus Upgrade Signals Fresh Optimism For Greek And Cypriot Banks

Regional Banks Enter A More Favorable Cycle

Bank of Cyprus and Eurobank are well positioned to benefit from a renewed re-rating of Greek and Cypriot bank stocks, according to Cyprus-based investment firm Roemer Capital, which upgraded Bank of Cyprus to a buy rating and reaffirmed its positive view on Eurobank.

The firm cited easing geopolitical tensions, resilient economic growth in Greece and Cyprus, lower funding costs and Greece’s expected transition to developed-market status as the main factors supporting the sector.

Roemer Capital also lowered its cost of equity assumptions, updated its forecasts following first-quarter 2026 results and extended its valuation horizon to the end of 2027, raising target prices across its banking coverage.

Bank Of Cyprus Gets The Largest Upgrade

Bank of Cyprus received the biggest revision, with Roemer Capital upgrading the stock from hold to buy and setting a target price of €11.10, implying potential total upside of 27%.

The firm highlighted the bank’s strong capital generation, profitability and projected 100% dividend payout, describing it as the strongest capital-return story among the banks under coverage. Roemer Capital maintained its buy rating on Eurobank, assigning a target price of €4.90 and forecasting potential upside of 28%. The report said the bank is well placed to benefit from loan growth, improving operating performance and merger-and-acquisition synergies.

National Bank of Greece and Piraeus Bank also retained buy ratings, with expected returns ranging from 25% to 36%. Optima Bank was upgraded to buy, while Alpha Bank remained at hold on valuation grounds.

Why Growth Still Sets The Region Apart

According to Roemer Capital, Greek and Cypriot banks continue to benefit from stronger economic fundamentals than many western European peers. The report pointed to faster economic growth, healthier balance sheets, low levels of non-performing exposures, capital ratios approaching 20% and strong customer deposit bases.

Analysts expect performing loans across the sector to grow at a compound annual rate of 6% to 8% through 2028, supported by private investment, digitalisation, green manufacturing, supply-chain expansion and a gradual recovery in household lending.

The report also said the conclusion of lending under the EU Recovery and Resilience Facility is unlikely to materially affect credit growth, as banks have already shifted back towards traditional commercial lending. Roemer Capital expects Euribor to remain between 2.2% and 2.5%, a level it believes should support both lending activity and net interest margins.

Geopolitics, Valuation And Market Structure Support The Case

The report said improving geopolitical conditions have strengthened the investment outlook, noting that Brent crude prices have largely returned to pre-war levels while Greek government bond yields have stabilised at around 3.5%. Although geopolitical risks remain, Roemer Capital believes the likelihood of a major inflationary shock or significant pressure on bank profitability has eased.

Another important catalyst identified by the firm is Greece’s expected promotion to developed-market status by FTSE Russell, STOXX and MSCI over the coming months.

According to the report, the reclassification should improve liquidity and attract a broader base of international investors. Roemer Capital also said Euronext’s acquisition of the Athens Exchange is expected to strengthen market infrastructure and increase international visibility, particularly for Bank of Cyprus and Optima Bank.

The firm noted that Bank of Cyprus has already benefited from its Athens listing, with average daily trading value increasing from less than €400,000 before its September 2024 move to nearly €6 million afterwards.

Economic Momentum Remains A Core Tailwind

Roemer Capital said both Greece and Cyprus have moved beyond post-crisis recovery and are now supported by private-sector-led growth. For Cyprus, the report highlighted recent tax reform and efforts to simplify the legal and regulatory framework, while also noting that limited foreign banking competition continues to support domestic lenders.

Overall, Roemer Capital expects Greek and Cypriot banks to remain well-positioned for profitable loan growth over the coming years.

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