March 18, 2013
Cyprus will put forward a new proposal on Monday under which a tax-free threshold or a lower tax rate for smaller depositors could be introduced, media reports said on Monday, in a move aimed at easing the pain of a bailout agreement which will impose an unprecedented tax on savers.
Reuters cited a government source in Cyprus as saying that the country is mulling a tax-free threshold on the bank deposit levy for smaller deposits. The level was still under discussion, it said. Earlier Dow Jones cited two unnamed European officials as saying savers with 100,000 to 500,000 euros would face a 10 percent tax, while those with savings over 500,000 euros would be taxed at 15 percent. Those with savings up to 100,000 euros would be taxed at 3 percent, according the report.
Under the original plan, every depositor under 100,000 euros would be taxed at 6.75 percent and those over that amount would face a 9.9 percent tax. The Cypriot Parliament has delayed a vote on the plan to Tuesday, an EU official told Reuters, “to allow time for more negotiations”.