New income tax legislation

The House of Representatives approved the new personal income

tax legislation, pending since May 2004. Specifically the main changes of the new legislation include that companies and self-employed persons with revenues over CYP 40,000 are obliged to keep proper accounting records, that Income tax returns should only be submitted by physical persons with revenues exceeding the stated taxable income

level and the penalty for delayed submissions is reduced to 5% from 10%. The above law will be effective as of the tax year 2006 onwards.