22nd February 2025 – 28th February 2025
LOCAL NEWS
1. Cyprus Tax Reform
On 26 February 2025, the President of the Republic of Cyprus, Mr. Nikos Christodoulides, addressed the presentation of the project “Cyprus Tax Reform: Recommendations for a Modern Tax System”, marking the first major reform in Cyprus' tax system in 23 years. The new tax system aims to be more efficient, fair and aligned with modern economic challenges.
It is important to highlight that these proposed changes are still in the consultation phase and have not yet been enacted into law. They are subject to further review and possible amendments.
Key Proposed Changes
- Corporate Income Tax Increase: The proposal suggests increasing corporate tax from 12.5% to 15%, aligning Cyprus with international tax trends.
- Drastic Reduction in Dividend Withholding Tax: If approved, the withholding tax on actual dividend distributions will drop from 17% to 5%. This would make Cyprus one of the lowest personal tax jurisdictions globally for entrepreneurs operating private businesses, as dividends would be taxed at just 5%, regardless of domicile status.
- Abolition of Deemed Dividend Distribution (DDD): The proposal includes removing DDD entirely, simplifying corporate tax obligations for businesses and investors.
- Increase in Personal Tax-Free Income: The tax-free threshold for individuals would increase from €19,500 to €20,500, providing tax relief to many taxpayers.
- New Tax Deductions: Additional relief measures are proposed for families, children and vulnerable groups, reducing social inequalities.
These tax reforms remain proposals and will undergo further consultations with economic experts, business organizations, and other stakeholders. The proposed changes are expected to come into effect in early 2026.
Related Articles:
StockWatch 27/02 - Christodoulides: More efficient and fair tax system
PhileNews 26/02 - Ανεβαίνει για όλους στις €20.500 το αφορολόγητο – Στο 15% ο εταιρικός φόρος
Knews 27/02 - Cyprus tax reform: A win for families, a challenge for businesses
Cyprus Mail 27/02 - Keravnos calls for tax reform to be implemented by autumn
TheFuture 26/02 - New Tax Era in Cyprus: Easing Burdens and Driving Equality
2. Extension of the “ERGANI” information system
Since 2 January 2025, all employers in Cyprus must register the Essential Employment Terms for each employee in the “ERGANI” Information System. This new employer obligation has been introduced through Decree ΚΔΠ 455/2024, issued by the Minister of Labour and Social Insurance, and published in the Official Gazette of the Republic of Cyprus on 20 December 2024.
According to the Decree, employers must complete the submission of their registration at the following link of the ERGANI System:
The deadline for completing this registration was 28 February 2025. However, the Minister of Labour and Social Insurance, by Decree of Friday, 28/02/2025, has granted an extension until 31st of March 2025.
For your ease of reference, the Decree is attached.
Related Articles:
28/02/2025 - Decree by the Ministry of Labour and Social Insurance - ERGANI Information System
Attachment 1:DECREE – ERGANI Information System – Extension by 31 March 2025
INTERNATIONAL NEWS
3. 3rd Capital Link Cyprus Business Forum 2025 – New York City – 4th April 2025
The 3rd Capital Link Cyprus Business Forum will take place on Friday, April 4, 2025, at the Metropolitan Club in New York City. Organized in partnership with the Cyprus Union of Shipowners and supported by the Shipping Deputy Ministry of Cyprus and Invest Cyprus, the forum will highlight Cyprus’s growing role as a key global business and investment hub.
The Cyprus delegation will be led by H.E the President of the Republic of Cyprus, Mr. Nikos Christodoulides, elevating further Cyprus’s profile on the international stage.
Prominent Cyprus Ministers, such as the Minister of Energy, Commerce & Industry, Mr. GiorgosPapanastasiou, the Shipping Deputy Minister to the President, Mrs. Marina Hadjimanolis, the Deputy Minister of Research, Innovation & Digital Policy, Mr. Nicodemos Damianou, as well as the Governor of Central Bank of Cyprus, Dr. Chris Patsalides, will participate at the Forum as keynote speakers. The panel discussions will focus on Cyprus strategic geopolitical position, the success of its recent economic upgrading to investment grade A status by world’s rating agencies, key regional energy developments, and its prominence as a leading maritime hub.
The event will bring together government officials and industry leaders to explore opportunities in finance, energy, shipping, and technology.
The Cyprus Union of Shipowners has led the efforts for the organisation of the Forum and will be the Luncheon Sponsor of the event where President Christodoulides will deliver his Keynote Address.
Moreover, our Union will be represented by members of the Executive Committee as well as other prominent members and distinguished personalities.
For more information about the event, please see below the related link.
For those who are interested in participating in the Forum, please click here to register.
Related Article:
3rd Capital Link Cyprus Business Forum 2025 – New York City – 4th April 2025
4. EU adopts 16th sanctions package against Russia
On Monday, 24th February 2025, the European Commission adopted the wide-ranging 16th package of economic and individual restrictive measures against Russia, as U.S. President Donald Trump pushes for negotiations over Ukraine’s future.
The package, targets aluminum imports, shadow fleet vessels, and exports of chemicals, chrome and other materials used in precision machine tools and also includes a ban on servicing oil and gas refineries, but it does not include a full ban on Russian liquefied natural gas, amid discussions with Washington about potentially increasing U.S. LNG exports to Europe.
The 16th package targets systemically important sectors of the Russian economy such as energy, trade, transport, infrastructure, and financial services. It also adds further measures aimed at tackling circumvention. To curb the risk of our sanctions being bypassed, certain provisions of the 16th package are now also mirrored in the Belarus sanctions regime. The EU has in addition updated and strengthened its sanctions regimes concerning Crimea and Sevastopol, and the non-government-controlled areas of Donetsk, Kherson, Luhansk and Zaporizhzhia oblasts.
In particular, the 16th package contains the following key elements:
ANTI-CIRCUMVENTION MEASURES
The package targets 74 additional vessels, bringing the total number of listed vessels to 153. These vessels are part of the shadow fleet or contributed to Russia's energy revenues. Vessels subject to today's measures are listed in Annex XLII to Regulation 833/2014.
Please see below the link to the aforementioned regulation which includes all the listed vessels:
The measures add a new listing criterion, targeting those who support the operations of unsafe oil tankers.
The package imposes targeted export restrictions on 53 new companies supporting Russia's military-industrial complex or engaged in sanctions circumvention. This includes 34 companies in countries other than Russia.
ADDITIONAL LISTINGS
It also includes 83 additional listings, including 48 individuals and 35 entities, such as those supporting the Russian military complex, active in sanctions circumvention, Russian crypto assets exchanges and in the maritime sector.
The 16th package also adds another new criterion for listing individuals and entities that are part of Russia's military and industrial complex, support it, or benefit from it.
TRADE MEASURES
Direct import ban on Russian aluminium:
In addition to the prohibition for imports of processed aluminium goods from Russia, already in place, this package includes a ban on EU imports of primary aluminium from Russia.
To ensure a smooth transition for businesses, a quota mechanism is introduced, allowing 275,000 tons, which equates to 80% of EU imports in 2024, to be used over a 12-month period.
Dual-use export restrictions have been extended to additional items in order to cut Russia's access to key technologies it has been using on the battlefield, covering, dual-use chemical precursors to produce chloropicrin and other riot control agents, Software related to Computer Numerical Control (CNC) machine tools used to manufacture weapons, and video-game controllers used by the Russian army to pilot drones on the battlefield., Chromium ores and compounds.
The limited derogations and exemptions for certain dual-use and advanced tech exports, e.g. for medical use, have been clarified and further tightened to support effective application by customs and licensing agencies.
Moreover, additional export restrictions have been introduced on industrial goods, specifically targeting minerals, chemicals, steel, glass materials, and fireworks, with special military significance.
ENERGY MEASURES
The EU has decided to completely prohibit temporary storage or the placement under free zone procedures of Russian crude oil or petroleum products in EU ports, which was until now allowed, if the oil complied with the price cap and went to a third country.
The package extends the prohibition to provide goods, technology and services for the completion of Russian LNG projects to also apply to crude oil projects in Russia, such as the Vostok oil project.
The package extends the existing software ban to restrict the export, supply or provision of oil and gas exploration software to Russia.
FINANCIAL SECTOR MEASURES
Russia has diverted much of its financial flows via smaller banks. The 16th package strengthens our measures on the financial sector. In particular:
Addition of 13 financial institutions to the list of entities subject to the prohibition to provide specialised financial messaging services.
Addition of 3 banks to the transaction ban due to their use of the Financial Messaging System of the Central Bank of Russia (SPFS) system to circumvent EU sanctions.
Extension of the transaction ban to enable the EU to list financial institutions and crypto asset providers that participate in the circumvention of the Oil Price Cap and facilitate transactions with listed vessels of the shadow fleet.
According to experts, as the EU strengthens its sanctions framework and expands enforcement efforts, businesses must proactively assess their compliance strategies to mitigate legal and operational risks.
In the light of the Commission’s decision, the Cyprus Shipping Deputy Ministry published on the 28th February 2025, SIN 1/2025 informing about the adoption of the 16th Package.
The Ministry stresses out that the restrictive measures are subject to constant review by the EU, therefore, it advisable to regularly monitor the related updates and consult the links provided by the Ministry.
Furthermore, the Ministry advises to abide To the EU Instruments implemented by virtue thereof and the SDM Sanctions Information Notices.
The Cyprus Union will continue to monitor the developments related to the new Sanctions Package in close cooperation with the Cyprus Government and ECSA, examining the impact of the sanctions to the Shipping Community and its implementation to the National Legislation.
Related Articles:
EC Europa 24/02 - EU adopts 16th sanctions package against Russia
Politico 24/02 - EU hits Russia with new sanctions amid Trump uncertainty
Lexology 24/02 - EU Ramps Up Sanctions: Key Updates on Russia and Belarus Measures
COUNCIL REGULATION (EU) 2025/395
COUNCIL REGULATION (EU) 2025/390
COUNCIL REGULATION (EU) 2025/392
5. US TREASURY REPORT
The US Treasury Report for all actions reported is hereby attached.
Related Article:
Attachment 2: US Treasury Report for week 22/02/2025 – 28/02/2025
6. PIRACY REPORT
The Piracy Report for all actions reported is hereby attached.
Related Article:
Attachment 3:Worldwide Threat to Shipping (WTS) Report, for the period between 29/01/2025 – 26/02/2025
Nothing important to report from the IMO and the ILO.