New tax breaks have been approved by the Cypriot government to boost the start-up sector and innovation in Cyprus. The tax incentives approved by the Council of Ministers include an up to 50% tax exemption, capped at €150.000, to persons investing, either directly or through investment funds, in innovative enterprises.
The package of the proposed tax incentives is based on a broad definition of ‘innovative enterprises’, which covers a wide non-restrictive spectrum of research and development and innovative ideas. The cabinet’s representative has stated that in order for the enterprise to qualify as an innovative company, it will need to prove that it has contributed 10% of its operating expenses on research and development in at least one of the last three years. The expenditure requirement will be examined by an external auditor and the companies will be assessed based on their business plan.
The proposed tax incentives package will be put into effect once approved by the House of Representatives.
