Cyprus has seen no evidence that large companies are leaving because of the global minimum tax, Finance Minister Makis Keravnos said this week, dismissing reports of an impending corporate exodus as unfounded. 

Speaking at the Finance Ministry, Keravnos addressed concerns surrounding Pillar Two, the global minimum tax framework developed through the Organisation for Economic Co-operation and Development (OECD) and the G20. 

He said claims that the rules were pushing major businesses away from Cyprus had come from “isolated voices which, if they do not serve personal interests, seem to arise from some obsessions”. 

Keravnos explained that the Finance Ministry is preparing an amending bill following a decision by the European Commission, describing this as a standard process arising from consultations with Brussels and Cyprus’ obligations under the OECD framework. 

However, he stressed that Pillar Two does not impose a 15 per cent tax on every company operating in Cyprus. Instead, it applies only to large multinational and domestic groups with annual revenue exceeding €750 million. 

Nor does it mean that all companies falling within that category will automatically pay additional tax at a flat rate of 15 per cent. Keravnos explained that “where a group’s effective tax rate falls below 15 per cent, the difference up to this minimum level is paid through specific and particularly complex rules”. 

He also pointed out that the measure was not introduced by Cyprus acting alone. It forms part of an international agreement reached through the OECD, G20 and EU on global minimum taxation and has since been incorporated into EU law. 

Keravnos said Cyprus was home to more than 2,000 foreign parent and subsidiary companies, with the government having “no information or indication” that they were preparing to leave or relocate elsewhere in the EU. 

Indeed, he argued that there were no objective reasons for such a move, saying that “we continue to have a competitive tax environment”. 

Cyprus’ strategic position was also gaining importance because of political and economic shifts, he added, referring in particular to the planned India-Middle East-Europe Economic Corridor (IMEC). 

Together with the high-level professional services available on the island, these advantages meant that “there is no concern”, Keravnos said. 

A small number of EU member states can temporarily delay applying parts of the rules until 2029 because they host fewer than 12 parent multinational companies, according to the minister. After that, he added, all member states will fall under the same system. 

Asked whether the ministry knew of any large companies that had already decided to leave, Keravnos replied that “the only case we have is that the registrations of foreign companies in Cyprus are constantly increasing”. 

When pressed to explain his reference to “obsessions” surrounding the issue, he responded with the ancient Greek expression “let those who understand, understand”. 

Turning to inflation, the minister said the latest figures showed that price pressures within the Cypriot economy remained comparatively contained. 

The Consumer Price Index recorded an annual increase of 3.5 per cent in August, up from 2.9 per cent in July. Keravnos noted that this remained below an earlier forecast of 4 per cent. 

Across the first eight months of the year, consumer prices were around 2 per cent higher than during the same period of 2025, which Keravnos said reflected a moderate increase in household living costs. 

Separately, Keravnos referred to the Harmonised Index of Consumer Prices (HICP), which placed Cyprus’ inflation rate at an estimated 5.2 per cent in August. He said the reading had been pushed higher by restaurants and accommodation services, where prices rose by 13.3 per cent. 

Keravnos attributed this to seasonal demand, explaining that tourism spending carries greater weight in the harmonised index during the summer, when the island’s population swells because of visitor arrivals. 

Meanwhile, the minister sought to play down the 7.2 per cent annual increase in registered unemployment recorded in August. 

He said the rise was largely linked to public administration, education, and administrative and support services, where a number of employment contracts had expired. As a result, he argued, the August figures offered “a picture of the moment” rather than a representative view of conditions across the labour market. 

However, Cystat’s seasonally adjusted total, which strips out recurring seasonal effects, also rose to 10,671 from a revised 10,563 in July, reaching its highest level since August 2024. 

“In economic policy, noise is not an argument; data is,” Keravnos concluded, adding that Cyprus was “not at an impasse” but was adapting to a new international environment while protecting the interests of the economy and strengthening the country’s credibility.