AmCham Cyprus urges balanced implementation of Pillar Two tax rules

Nicosia, Cyprus. The American Chamber of Commerce in Cyprus has called for a balanced, evidence-based implementation of the OECD/G20 Pillar Two international tax framework, warning that decisions could affect investment, employment and Cyprus’ role as an international business hub.

The chamber said it supported Cyprus’ commitments to international tax cooperation, transparency and compliance with OECD and EU frameworks, while urging policymakers to consider the country’s competitiveness.

Investor concerns

AmCham Cyprus said it had received concerns from international investors, multinational companies, business leaders and professional service providers over the implications of evolving Pillar Two rules for future investment decisions.

It said some US-headquartered multinationals could reconsider expansion plans, select alternative jurisdictions or decide not to establish operations in Cyprus if the country’s competitive position weakened.

The chamber said the scale of any potential impact remained uncertain, but argued that the concerns required an objective assessment of possible effects on investment flows, employment and long-term economic growth.

Government response

The intervention followed comments last week by Finance Minister Makis Keravnos, who said Cyprus had seen no evidence of large companies leaving the island because of the global minimum tax.

Speaking at the Finance Ministry, Keravnos dismissed reports of an impending corporate exodus as unfounded. He said claims that Pillar Two was driving major businesses away from Cyprus came from “isolated voices which, if they do not serve personal interests, seem to arise from some obsessions”.

Keravnos said the Finance Ministry was preparing an amending bill following a decision by the European Commission, describing the move as a standard outcome of consultations with Brussels and Cyprus’ obligations under the OECD framework.

Scope of the rules

The finance minister said Pillar Two does not impose a 15 per cent tax on every company operating in Cyprus. The rules apply only to large multinational and domestic groups with annual revenue exceeding €750 million.

He added that companies within that category would not automatically pay additional tax at a flat rate of 15 per cent.