The Cyprus Parliament voted a new law on 24th of November for waiving all interest and penalties imposed for tax liabilities incurred in previous tax years until 2008. The new tax law specifically instructs that the taxpayer will be only liable to the principal amount of the tax liability plus 5% penalty. All previous penalties and interest imposed on the tax principal amount due will be waived and effectively written-off.

The new legislation will be applicable upon its publication in the Official Government Gazette and remain in force until March 2012. It is evidenced that the Government’s objective is the efficient and prompt collection of tax liabilities following up the latest austerity measures imposed.

A detailed and explanatory newsletter will follow upon publication of the official legislation in the Government Gazette.