Cyprus has opened a public consultation on proposed amendments to its Pillar Two legislation, including changes to the Qualified Domestic Minimum Top-up Tax (QDMTT), following European Commission observations.
The Cyprus Ministry of Finance has opened a public consultation on 30 July 2026, on the Global Minimum Level of Taxation for Multinational Enterprise Groups and Large-Scale Domestic Groups in the Union (Amendment) Law of 2026.
The amending bill was prepared following observations from the European Commission on the correct transposition of Council Directive (EU) 2022/2523, as amended by Council Directive (EU) 2023/2861 of 14 December 2023, concerning the Pillar Two global minimum tax rules.
Amendments to QDMTT
The bill proposes changes to the definitions and mechanics of the domestic top-up tax implemented by Cyprus. These amendments are intended to ensure that the measure meets the Qualified Domestic Minimum Top-up Tax (QDMTT) standards established under the EU Directive and the OECD framework.
The bill also incorporates the option to apply a Qualified Domestic Minimum Top-up Tax (QDMTT) with effect from 1 January 2026.
In addition, further amendments have been included to align Cyprus’ implementation of the Pillar Two rules with relevant OECD guidelines and recommendations.
Scope of Pillar Two rules
The Pillar Two framework applies a minimum effective tax rate of 15% to entities belonging to Multinational Enterprise Groups or large-scale domestic groups with annual revenues exceeding EUR 750 million.
The framework is intended to address arrangements that allow multinational enterprises to shift profits to jurisdictions where they face zero or very low taxation.
The proposed amendments will allow Cyprus to address the European Commission’s observations and make further changes based on OECD guidance ahead of the Republic of Cyprus’ assessment in autumn 2026. The assessment will consider whether Cyprus’ national legislative framework complies with the internationally agreed Pillar Two rules.
The consultation officer is Naya Syrimi, who can be contacted at nsyrimi@mof.gov.cy or 22601267. Stakeholders have until 5 September 2026 at 23:50 to submit comments.
