In pursuance to the Cyprus – Troika memorandum of understanding, Cyprus will be obliged to abolish all exceptions for paying the Annual Levy of Euro 350. In accordance to existing rules and exceptions, the annual levy is only paid by Companies which have real activities and companies with assets in Cyprus.
Abolishing the exceptions for payment of the annual company levy will subject approximately half of all the registered companies to the annual levy of Euro 350. The policy will certainly lead to many liquidations of dormant companies and the tidying up of the company registry. It is quite uncertain whether the measure will be effective in raising revenues for the government, as it is impossible to ascertain how many of the dormant Cyprus companies are indeed dormant for a reason and how many are not. Our guess is that the end effect for the government revenues will be minimal.
The policy is expected to take effect in year 2013 and will cover the company levy imposed for 2013.