The European Parliament’s Subcommittee on Tax Matters (FISC) has sent a clear and firm message to Cyprus: while it welcomes the country’s reform efforts and political will, legislative change alone is not enough. Robust enforcementand adequate resourcing are essential if Cyprus is to shed its image as a weak link in the EU’s tax chain.
Progress Noted — But Concerns Remain
In an official statement following its visit to Nicosia, the FISC delegation acknowledged Cyprus’s progress, citing political intent and legislative alignment with European and international standards. However, delegation head and FISC Vice-Chair Kira Peter-Hansen stressed that implementation capacity remains a weak spot.
“Cyprus has for many years been in the spotlight for facilitating complex corporate structures that have been abused for tax avoidance and evasion,” she said. “While positive reforms are under way, and there is clear political will, these efforts will fall short without sufficient investment in enforcement mechanisms.”
Peter-Hansen also flagged ongoing concerns over the misuse of tax residency schemes and ‘golden visa’ programmes, which she said continue to be exploited.
Tax reform and housing pressure
Referring to Cyprus’s ongoing comprehensive tax reform, Peter-Hansen noted that it comes at a time of economic uncertainty, but welcomed its ambition to enhance competitiveness.
She echoed the call for simplification and rationalisation of EU tax legislation, while cautioning against backtracking on tax justice and transparency. Of particular note was her mention of rising housing costs in Cyprus — a trend she linked to tax incentives targeting wealthy individuals, with implications for the wider population.
Delegation meetings in Nicosia
The four-member European Parliament delegation included:
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Kira Peter-Hansen (Greens/EFA, Denmark)
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Michalis Hadjipantela (EPP, Cyprus)
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Kinga Kollár (EPP, Hungary)
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Pierre Pimpie (Patriots for Europe, France)
During the two-day visit, the group held meetings with the Speaker of the House of Representatives, members of the Finance and Budget Committee, the Deputy Tax Commissioner, and other key stakeholders.
Support for OECD alignment and 15% rate
In a meeting with the House Finance Committee, Peter-Hansen called the tax reform “very interesting” and praised Cyprus’s plans to raise its corporate tax rate to 15%, in line with the OECD minimum global tax and EU commitments.
She also welcomed steps taken by Cyprus to phase out the ‘golden passport’ and investor citizenship schemes, though she said monitoring and sanctions must follow to ensure compliance.
Finance Committee Chair Christiana Erotokritou (DIKO) reaffirmed that Cyprus is fully aligned with EU tax policies, while MEP Michalis Hadjipantela (EPP) noted that Brussels is aware of Cyprus’s housing affordability crisis and promised supportive measures where possible.
