Following our previous newsfeed on this, the tax incentives for investing in innovative enterprises have been extended even further following a law approved by Cyprus Parliament recently. The extension concerns the application of the incentives also for corporate investors (so far only physical persons were entitled to them).
The incentives aim to support start-up entities in developing innovative products and services, as well as to enhance entrepreneurship and strengthen the entrepreneurial ecosystem of Cyprus.
The incentives provide that a qualifying investor which makes a risk-finance investment in an innovative small and medium-sized enterprise (SME) can deduct the cost of that investment from its taxable income.
The deduction will be calculated as 30% of the amount invested, provided it will not exceed 50% of the taxable income of the investor and that it will not exceed the amount of €150,000.
The tax benefit will have a retrospective effect from 14 February 2022, date at which the proposal gained approval from the Directorate-General for Competition of the European Commission.