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New tax measures to take effect in 2014
There are several new tax measures that are already incorporated into Cyprus legislation, which will take effect in 2014. Taxand Cyprus highlights the key measures for corporations and individuals alike to take note.
Contributions to social insurance funds
The contribution to social insurance funds for both employees and employers will increase from 6.8% to 7.8%. This figure is set to increase by 0.5% every 5 years. Contributions for self employed persons will increase from 12.6% to 14.6% for years 2014-2018.
The Special Levy on gross salaries and pensions of both private and public sectors, as well as self employed earnings which was introduced in 2012, will continue to be applicable until 2016. The lower rate of 2.5% will be applicable on amounts starting from EUR 1,500 instead of EUR 2,500 as it was in 2013. These measures are effective from 1 January 2014.
The standard VAT rate of 18% is increased to 19% and the reduced rate of 8% is increased to 9%, which is applicable from 13 January 2014.