Cyprus needs to urgently update, renegotiate and expand many of its double taxation agreements, some of which were signed decades ago, including some before the 1970s (the Soviet Union and Czechoslovakia) and no longer apply to current financial and taxation realities, not to mention political.
Financiers point to the importance of replacing this outdated version the soonest possible as it is likely to raise serious practical complications.
According to Finance Ministry figures, 27 of the 45 double taxation agreements currently in force date before 2000, while three were concluded prior to 1970.
The oldest was signed in May 1951 with Norway and put into force four years later. In the top three are Greece, an agreement signed in 1968 and enforced a year later, while Ireland was signed in the same year and enforced in 1970.
In terms of financial and trade significance, the double taxation agreement with Britain, a global investor giant, was signed as far back as 1974, while also of note is the fact that the arrangement with China, currently a growing investment target for Cyprus, dates to 1990.
Some steps have been taken to rectify these major omissions, as according to Finance Ministry sources, Cyprus has renegotiated its agreement with Norway and the new document is expected to be signed within the next couple of weeks.
In parallel, Cyprus is forging ahead with implementation of five new double taxation agreements. As of January the agreements with Estonia, Finland, Portugal, Spain and Ukraine come into force, signed in the past two years.
Sources say that an avoidance of double taxation agreement will be signed with Switzerland for the first time in early 2014, while agreements with the Netherlands, Lithuania and Latvia are well on track. The government will also contact Luxemburg, a major European investment centre, for a first time agreement in early 2014, while Hong Kong, the Asian trade giant, is also on the cards.
An advisory group on such agreements will be set up at the Finance Ministry in the near future.