Cyprus is getting closer to receiving a reasoned opinion by the European Commission over the failure to transpose into national law of the EU Directive 2022/2523 on the imposition of a global minimum effective tax rate of 15% on Multinational Enterprises (MNEs) or large-scale domestic groups with revenues of more than €750 million per annum.

A European Commission official said that an infringement procedure has been set in motion for Cyprus along with other nine member-states, which should by January 1 2024 have transposed the said directive into national law.

The same official clarified that Cyprus has not received a reasoned opinion, which would set the time frame which may end up at the European Court, as after receiving a reasoned opinion a member-state has two months to reply.

"You will receive a reasoned opinion soon if there is no sufficient signs,” the official told Cypriot journalists.

The Finance Ministry in October 2023 announced that it has drafted a bill a titled "The Law on Ensuring a Global Minimum Level of Taxation for Multinational Enterprise Groups and Large-Scale Domestic Groups in the Union", whereas the draft bill has been submitted for public consultation. This draft legislation follows the pillar two of the OECD proposals on base erosion and profit shifting (BEPS).

The same official acknowledged that the said legislation is much more complex than other proposals tabled by the Commission, noting that for this reason working groups between member-states and the Commission in 2023, noting that in this process the commission has received approximately 400 questions on the issue.

He noted however that “the political guidance that we have is to be very strict.”