Cabinet approves 20% tax deduction for research expenses

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The Cabinet has granted a 20% tax deduction for research and development expenses in a campaign to attract foreign investments and businesses to Cyprus.

After Wednesday’s meeting, Minister of Finance Constantinos Petrides said the deduction would be valid for three years, starting from the tax year 2022.

He said it is the second pillar of the program for attracting investments and businesses in Cyprus – after headquartering incentives — “a program that seems to yield strong results”.

“In this way, we support the growth and competitiveness of businesses.”

He pointed out that the European Commission, in its recent report on Cyprus, stated that the export of services to Cyprus, despite the blow to tourism, especially by high-tech companies and professional companies, contributed greatly to economic growth.

Petrides said the new investment programs are part of the long-term framework of a new growth model for Cyprus,

“We believe we will have tangible results to turn Cyprus into a tech destination, and we are moving towards this direction”.