Cabinet widens tax exemption for innovation

The Cabinet has approved a bill which amends the income tax law for existing tax exemption for investments in small to medium innovation companies and extends to cover corporate investors.

According to the Ministry of Finance, the bill is included in the commitments of the National Recovery and Resilience Plan, which aims to provide tax incentives to attract investments in Research and Innovation.

The tax advantage will be calculated as 30% of the amount invested of own funds investment in an approved small and medium innovation enterprise,  provided that this deduction will not exceed 50% of the taxable income of the legal entity or be more than €150,000.

The proposed framework has been drafted following a series of consultations and a decision taken by the European Commission’s Directorate-General for Competition.

The start date of this framework is 14 February 2022, when the Directorate-General for Competition took its decision.

The bill will be submitted for approval to the House of Representatives.

€20 mln Cypriot VAT deferral scheme

Meanwhile, The European Commission has approved a €20 mln Cypriot VAT deferral scheme to support businesses affected by the coronavirus pandemic and the restrictive measures taken.

The EC said the scheme was approved under the State aid Temporary Framework.

Under the scheme, the aid is in the form of deferrals of VAT with the exclusion of interests and penalties related to the deferred amounts.

It is designed to enhance the beneficiaries’ liquidity and help them continue their activities during and after the pandemic.

The Commission found that the Cypriot scheme is in line with the conditions set out in the Temporary Framework.

The aid will be granted no later than 30 June, and the VAT payment will be deferred no later than 30 June 2023.