We would like to inform you that initial negotiations between the Cyprus government, European Union and the IMF have led to a proposal of imposing a onetime levy of 6,75% on deposits under EUR 100.000 and 9,99% on deposits over EUR 100.000.
The above mentioned proposal is being put before the Cyprus House of Parliament for a vote today (Monday-18/03/2013) even though it is a religious public holiday in Cyprus.
In case the Parliament ratifies the proposal, either on Tuesday or Wednesday bank balances of all physical persons and corporations, which include current accounts, notice accounts and fixed deposit accounts, as at the close of the banks on Friday (15/03/2013) kept at all banks in Cyprus (both local and foreign) will be adjusted based on the percentages in the above mentioned proposal.
In exchange for the financing of the Cyprus economy through the deposit taxation, the fund holders will receive an equivalent amount in shares of the two major Cyprus banks which are Bank of Cyprus and Laiki Bank (formerly Marfin Popular Bank).
In addition to the above the corporate tax shall be increased from 10% to 12.5% and a new tax on the income from interests on deposits shall be introduced.
More details will be announced in the next few days.