Accountancy Cyprus - No. 147 - July 2025

ICPAC’s 64th AGM: A Milestone in Leadership and Global Standing

Kyriakos Iordanou GENERAL MANAGER OF ICPAC

Vision to remain relevant, competitive, and sustainable THINKING AHEAD

Usually, good things carry their inescapable drawbacks . . . This applies to Cyprus as well since antiquity, given its premium and much coveted geographical and geostrategic position.

Situated adjacent to the volatile Middle East region, we have been affected by all events happening in our neighbourhood. On the other side, Cyprus has for centuries been an attractive political, military, commercial, and business stronghold for bigger and stronger countries. For the last 4-5 decades, Cyprus’ activity as a place for international business surged, providing a safe harbour and a springboard, simultaneously, to international business players to extend their operations globally, capitalizing on the benefits offered by the country and its people.

The last 10 years, though, especially after the economic crisis, the Investment Programme termination, and the war in Ukraine, the story changed. Cyprus was forced to adapt to a new business environment and a stricter compliance regime, with a significant part of the traditional business and norms being lost.

Now, amid the turbulence in the Middle East region and the ongoing war in Ukraine, Cyprus strives to reposition itself in the business and on the political map, without forgetting that it remains a divided island because of an invasion and an illegal occupation. Hence, being pragmatic, we continue to operate in a context of relative uncertainty and instability. Despite all that, Cyprus’ economy demonstrates remarkable resilience and growth during the last few years, returning to investment ratings.

The question, however, remains: Is this sustainable? Does it depict the true picture for the average business and household? Are the numbers that prosper, or are the people prospering too? How optimistic is the new generation about the fulfillment of their aspirations and goals?

So, to put it in context, countries like Cyprus, that is small, limited in natural resources and industrial capacity, with open economies and susceptible to the globalized terms of trade and finance, usually must do more than others to keep up with the endeavored prosperity for its people.

I would dare suggest that the best defense in such circumstances for countries like ours is to strengthen the national economy, the business and commercial base, and internal infrastructures, the social cohesion and welfare of the citizens. In doing so, it is critical to maintain a disciplined stance towards enhancing innovation, fostering differentiation, and capitalizing on competitiveness! We must rethink the way we operate and bring in the changes before they find us!

At the same time, it is vital to forge international strategic and commercial collaborations and alliances. This includes

the attractiveness and trust that our country instills in third countries and foreign investors. It is therefore extremely important to align their interests with those of our homeland. So, we need to understand and appreciate the risks surrounding our country and our economy, and mitigate them. In this manner, Cyprus becomes increasingly relevant to third-party interests, hence enriching its diplomatic and business arsenal. The geostrategic and geopolitical location of the island can enhance its diplomatic and bargaining power, provided we do that reasonably. At this point, energy and hydrocarbons may come again into the agenda…

Diplomacy and good international relations are fundamental in today’s landscape. Without any doubt, the establishment of the Strategic Dialogue with the United States, the Republic’s diplomatic initiatives within and beyond the European Union, the toolbox offered by the EU membership, and the upcoming Presidency of the EU Council in the first half of 2026 pose as very optimistic opportunities for our country.

So, for sustainable growth, especially during challenging times, the state of the economy is the barometer, coupled with political stability and moral behavior. As a third eye, I would have liked to see the government placing much more emphasis on substance, on bringing about the much-needed reforms, on fostering innovation and productivity, on depleting the monsters of red tape and corruption, on promoting excellence, competence, and merit!

I would also like to see the political establishment being more coherent and congruent, seeing the bigger picture, despite any micro-difference. After all, the running of the country, i.e., governance, is a collective effort.

It would be equally important to see more public-private initiatives and cooperation, with the private sector and civic society, to complement the political agenda.

I would like to see a clear vision, showing where we want this country, its business orientation, and its people to be and do in the next 10 years, at the very least. We should strive to set top-quality standards and pursue long-term goals that would yield sustainable benefits, rather than chasing the so-called “low-hanging fruit”, just to score an “easy win”.

Again, this is not an isolated or one-man exercise; it is a collective activity based on knowledge, competence, acumen, resilience, foresight, and culture. And in this exercise, we all have a role to play, whether small or significant is irrelevant. Cyprus surely has the human capital to succeed; let’s utilize it. It is about time to learn from past mistakes and have a fresh start. Let’s be visionary, proactive, and methodical to uphold growth, relevance, competitiveness, and ultimately, sustainability and prosperity!

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ACCOUNTANCY

CYPRUS CONTENTS

ISSN 1450-2380

The Institute Council

Odysseas Christodoulou - P resident

Andreas Andreou - Vice P resident

Eleni P yrgou (Secretary)

Members

Andreas Avraamides, Marios Demetriades, George Hadjineophytou, Stavros Ioannou, Constantinos Kallis, Savvas Kleitou, Eliza Livadiotou, Ioanna Nicolaidou, Nicolas Shiakallis, Spyros Spyrou, Nicos Stavrou, Afxentis Zemenides

General Manager

Kyriakos Iordanou

Address

11 Byron Avenue, 1096 Nicosia, Cyprus

Mailing Address

P.O. Box 24935, 1355, Nicosia, Cyprus

Tel.: +357 22870030

Fax: +357 22766360

Ε-mail: info@icpac.org.cy www.icpac.org.cy

Design and Pagination

Maria Stylianou

The publication is prepared by RedwolfOgilvy 8 Ilioupoleos Street

Tel: +357 22252522

Fax: +357 22767970

E-mail: info@redwolfogilvy.cy www.redwolfogilvy.cy

Accountancy Cyprus is published quarterly by the Institute of Certified Public Accountants of Cyprus and is sent free to all members of the Institute as well as to many other persons, companies, and organizations.

A summary of the Institute’s most important recent initiatives, announcements, and activities.

• ICPAC Meets with the Commissioner for State Aid Control

• ICPAC General Manager Attends Anniversary of the Serbian Association of Accountants and Auditors

• ICPAC’s CSR Committee Hosts Tree-Planting Event in Nicosia

• 15th Nicosia Economic Congress

• ICPAC at Corporate Governance Today Conference 2025

• ΙCPAC Reinforces Its Enduring Commitment to Academic Excellence at the Cyprus University of Technology

“The Global Accountancy Profession Is a Pillar of Trust in the Economy”

IFAC President Jean Bouquot discusses the organisation’s mission, the ESG imperative, the attractiveness of the profession, and Cyprus’ position in the global accounting landscape.

• ICPAC leadership highlights transparency, sustainability, and strategic engagement at the 4th Mediterranean Finance Summit

• Dr. Christodoulos Patsalides outlines the road ahead at the 4th ICPAC Mediterranean Finance Summit

• Pavlos Kontides: Mastering Strategic Discipline and Informed Leadership

Unaffordable Housing for Our Youth

Investing in Social Cohesion and the Strategic Potential of the “Indian Touch”

Strengthening Institutional Collaboration: ICPAC Meets with the Commissioner for State Aid Control

On 28 March 2025, the Institute of Certified Public Accountants of Cyprus (ICPAC) had the distinct honour of meeting with Ms Stella Michaelidou, Commissioner for State Aid Control. The meeting, held in a spirit of mutual respect and constructive dialogue, focused on areas of common interest and on the evolving regulatory landscape surrounding state aid and its implications for the accounting and audit profession.

The visit formed part of ICPAC’s ongoing outreach to key public institutions, aiming to foster closer collaboration and create open channels of communication with stakeholders who play a critical role in Cyprus’s economic and regulatory framework.

During the meeting, Ms Michaelidou provided a comprehensive overview of the responsibilities, powers, and operational priorities of the Office of the Commissioner for State Aid Control. These include ensuring compliance with EU rules on state aid, monitoring support schemes, and evaluating public sector interventions to safeguard fair competition and transparency. The discussion shed light on the increasingly complex and technical nature of this regulatory area, which is becoming ever more relevant to accountants and auditors engaged in both advisory and assurance services.

The ICPAC delegation shared its perspectives on the importance of clarity, consistency, and collaboration in the interpretation and implementation of rules governing state aid. It was also noted that, as professional accountants often act as intermediaries between businesses and regulatory authorities, their understanding of such frameworks is essential for ensuring lawful and effective outcomes for their clients and the economy at large.

THE VISIT FORMED PART OF ICPAC’S ONGOING OUTREACH TO KEY PUBLIC INSTITUTIONS, AIMING TO FOSTER CLOSER COLLABORATION AND CREATE OPEN CHANNELS OF COMMUNICATION WITH STAKEHOLDERS WHO PLAY A CRITICAL ROLE IN CYPRUS’S ECONOMIC AND REGULATORY FRAMEWORK.

A significant portion of the meeting was devoted to exploring opportunities for deeper institutional coop eration. Both parties acknowledged the benefits of exchanging expertise and maintaining a regular dialogue, with a view to facilitating the work of accounting professionals and promoting a regulatory environment conducive to sustainable economic activity.

The ICPAC delegation was represented by Mr Spyros Spyrou, Member of the Board of Directors, Mr Kyriakos Iordanou, General Manager, and Ms Eleni Pyrgou, Legal Affairs Officer. Representing the Office of the Commissioner, alongside Ms Michailidou, were Mr Konstantinos Holevas and Ms Eleni Ioannidou.

ICPAC expresses its sincere appreciation to Ms Michaelidou and her team for the warm reception and the insightful exchange of views. The Institute looks forward to building upon this meeting with continued engagement, knowledge sharing, and policy dialogue — all aimed at supporting the public interest and strengthening Cyprus’s institutional integrity.

ICPAC General Manager Attends Anniversary of the Serbian Association of Accountants and Auditors

The General Manager of the Institute of Certified Public Accountants of Cyprus (ICPAC), Mr Kyriakos Iordanou, had the honour of representing the Institute at the official celebration marking the 70th anniversary of the Serbian Association of Accountants and Auditors (SAAA), held in Belgrade.

The commemorative event brought together representatives of national professional bodies, regional institutions, and international organisations, all united in their commitment to promoting high-quality financial reporting, professional integrity, and sound economic governance. The SAAA’s 70-year journey is a testament to the enduring value of professional accountancy in supporting economic development, transparency, and public trust.

During the celebrations, Mr Iordanou extended ICPAC’s warm congratulations to the leadership and members of the Serbian Association, recognising the significant contribution the SAAA has made to the accounting profession in Serbia and beyond. He emphasised that strong ties between national and regional professional accountancy organisations are essential in addressing today’s shared challenges — from regulatory complexity and technological disruption to the growing demand for sustainability and ESG-related reporting.

THE COMMEMORATIVE EVENT BROUGHT TOGETHER REPRESENTATIVES OF NATIONAL PROFESSIONAL BODIES, REGIONAL INSTITUTIONS, AND INTERNATIONAL ORGANISATIONS, ALL UNITED IN THEIR COMMITMENT TO PROMOTING HIGH-QUALITY FINANCIAL REPORTING, PROFESSIONAL INTEGRITY, AND SOUND ECONOMIC GOVERNANCE.

“The future of our profession lies in our ability to cooperate across borders, to exchange knowledge, and to support each other in maintaining the highest standards of professionalism and public service,” Mr Iordanou noted. He also highlighted the need for continuous dialogue on issues such as public sector reporting, audit quality, digital transformation, and the evolving role of accountants in a world shaped by sustainability imperatives and geopolitical uncertainties.

Participation in such milestone events is a key part of ICPAC’s broader strategy to maintain active engagement with the international professional community. Mr Iordanou expressed his appreciation for the opportunity to be part of this historic occasion and underlined ICPAC’s readiness to further strengthen bilateral and multilateral relationships with fellow organisations.

As ICPAC continues to expand its international footprint, its leadership remains committed to initiatives that promote collaboration, transparency, and sustainable economic progress — values that were at the very heart of the celebration in Belgrade.

ICPAC’s CSR Committee Hosts Tree-Planting Event in Nicosia

Aheartwarming and meaningful event centred on tree planting and sustainability was organised by the Corporate Social Responsibility (CSR) Committee of the Institute of Certified Public Accountants of Cyprus (ICPAC) on Sunday, April 13, at Semelis Park, located on the border between the Palouriotissa and Aglantzia districts in Nicosia.

The event was held in collaboration with the Municipality of Nicosia, under the framework of the “Nicosia Together” programme, and brought together participants of all ages, with children playing a leading role throughout the day.

The Mayor of Nicosia, Mr Charalambos Prountzos, addressed the attendees and highlighted the importance of such initiatives in cultivating environmental awareness and responsibility within local communities.

Representing ICPAC, Communications Officer Ms Constantina Achilleos reaffirmed the Institute’s commitment to initiatives that embrace people, the environment, and sustainable development.

Throughout the event, a total of 50 trees, 44 shrubs, and aromatic plants were planted with the active participation of children, some as young as four years old, who enthusiastically got involved in every step of the process.

A key supporter of the initiative was the NGO Together Cyprus, known for its environmental awareness campaign Let’s Do It Cyprus. The organisation’s CSR Lead, Mr Panos Demetriou, introduced the children to the interactive educational game “Sustainable Neighbourhood”, inspiring them to imagine and design their ideal community based on the United Nations Sustainable Development Goals (SDGs), including good health, quality education, clean surroundings, equal

access, and environmental protection. Through painting and creative play, the children expressed their vision for a better world.

A particularly creative and multisensory contribution came from the VerboErgo therapeutic centre, whose team, led by registered occupational therapist Ms Myroulla Christoudia, facilitated engaging messy play activities. Children painted jars, planted purslane seeds, made spring wreaths, and created their miniature trees, developing motor, social, and creative skills through experiential learning.

A significant role was also played by Nevada Nurseries Ltd. Agronomist Ms Stavri Tofari and floral design educator Ms Chara Thomá guided the children in planting lentisk trees, rosemary, thyme, and oleanders. The children learned how to prepare the soil, dig, water, and care for plants, while also discovering the cultural and ecological value of native species such as the mastic tree (Pistacia lentiscus).

THE EVENT WAS HELD IN COLLABORATION WITH THE MUNICIPALITY OF NICOSIA, UNDER THE FRAMEWORK OF THE “NICOSIA TOGETHER” PROGRAMME, AND BROUGHT TOGETHER PARTICIPANTS OF ALL AGES, WITH CHILDREN PLAYING A LEADING ROLE THROUGHOUT THE DAY.

At the end of the day, the children took home their creations, and a small jar filled with soil and seeds –a symbol of growth, care, and responsibility toward the planet.

The event concluded in a festive atmosphere with the support of sponsors officestationery.com.cy, which provided the craft supplies, and KEO, which offered water and juices for all participants.

15th Nicosia Economic Congress: A Call for Economic Resilience Amid Global Trade Tensions

The 15th Nicosia Economic Congress convened once again as one of Cyprus’s most prestigious economic forums, bringing together senior executives, entrepreneurs, economists, academics, ministers, and key policymakers to discuss the state and prospects of the Cypriot economy.

Delivering the opening address, Mr. Kyriakos Iordanou, General Manager of the Institute of Certified Public Accountants of Cyprus (ICPAC), warned that “collateral effects will emerge if the commercial crisis proves to be prolonged.”

Mr. Iordanou stressed that the ongoing global trade war is reminiscent of earlier economic periods, noting a visible shift back towards national currencies and the reshoring of production capacity within national borders.

“The global political landscape is increasingly volatile,” he said, “with the United States and China questioning each other’s role and intentions in the world order.” He also did not rule out the possibility of long-standing alliances coming into confrontation, adding that “the geopolitical environment is changing rapidly, with more and more countries focusing on matters of defence and security.”

Given this international uncertainty, Mr. Iordanou underlined the urgent need for Cyprus to develop a resilient and stable economic model. He identified the strengthening of international relations, climate change adaptation, the ESG agenda, and tax reform as issues of strategic importance.

He also made a strong appeal for collective action and emphasized the importance of reinforcing Cyprus’s economic resilience. “The voices of the younger generation and tomorrow’s business leaders are critical to shaping a more sustainable and secure economic future,” he said.

MR. IORDANOU STRESSED THAT THE ONGOING GLOBAL TRADE WAR IS REMINISCENT OF EARLIER ECONOMIC PERIODS, NOTING A VISIBLE SHIFT BACK TOWARDS NATIONAL CURRENCIES AND THE RESHORING OF PRODUCTION CAPACITY WITHIN NATIONAL BORDERS.

The Nicosia Economic Congress, now in its fifteenth consecutive year, continues to provide a dynamic platform for discussing Cyprus’ economic trajectory, fostering informed debate, and generating actionable insights on the key challenges and opportunities facing the country.

ICPAC Participates in Corporate Governance 2025 Conference.

The Institute of Certified Public Accountants of Cyprus (ICPAC) reaffirmed its commitment to promoting strong corporate governance and institutional integrity through its active participation in the Corporate Governance Today Conference 2025. The event, hosted by the European Institute of Management and Finance (EIMF) in collaboration with The Chartered Governance Institute UK & Ireland, brought together leading voices from the governance, compliance, and financial regulation sectors.

THE PANELLISTS SHARED INSIGHTS ON EMERGING REGULATORY CHALLENGES, RISK CULTURE, AND THE EVOLVING EXPECTATIONS OF BOARDS AND STAKEHOLDERS IN RELATION TO COMPLIANCE.

A key highlight of the conference was the panel discussion titled “Compliance as a Cornerstone”, moderated by ICPAC’s General Manager, Mr Kyriakos Iordanou. The discussion underscored how effective compliance frameworks can strengthen governance structures, enhance accountability mechanisms, and foster trust across the corporate ecosystem.

The panel featured distinguished experts, including:

• Ms Andrea Moundi Savvides, Chair of the Cyprus Compliance Association and Global Director of Risk and Compliance at Harneys

• Mr George Apostolides, Board Member and Chief Compliance Officer at Eurobank Cyprus Ltd

• Dr Marios Clerides, Board Member of the Fiscal Council and seasoned governance expert

The panellists shared insights on emerging regulatory challenges, risk culture, and the evolving expectations of boards and stakeholders in relation to compliance. They also examined how compliance is no longer a box-ticking exercise but a vital strategic function that ensures ethical business conduct and long-term resilience.

The conference was proudly sponsored by XM and supported by key institutions in the sector, including ACAMS Cyprus Chapter, TechIsland®, ICPAC, ACIFF MAP S.Platis, and the Cyprus Compliance Association. ICPAC’s participation reflects its ongoing advocacy for high standards in corporate responsibility and its belief that compliance is a cornerstone of sustainable and trustworthy governance.

ICPAC Reinforces its Enduring Commitment to Academic Excellence at the Cyprus University of Technology

The Institute of Certified Public Accountants of Cyprus (ICPAC) proudly participated once again in the Annual Awards Ceremony of the School of Business and Economics at the Cyprus University of Technology (CUT), held on Friday, 20 June 2025. The ceremony honoured high-achieving students from the School’s two academic departments — the Department of Finance, Accounting and Management Science, and the Department of Shipping — in recognition of their academic distinction, ethical conduct, and dedication to learning.

A Strategic Investment in the Next Generation

ICPAC’s sponsorship of selected student awards reflects the Institute’s broader strategy to promote academic excellence and support Cyprus’s long-term socio-economic development. Through initiatives such as these, ICPAC actively invests in the cultivation of a skilled, principled, and well-prepared professional workforce — a goal that remains central to its mission and vision.

The Institute believes that recognising and rewarding merit at university level is critical in motivating students, enhancing academic standards, and bridging the gap between academic theory and professional practice. Supporting the achievements of students at one of Cyprus’s leading public universities reinforces the Institute’s dedication to the advancement of the accounting and finance profession.

University–Industry Collaboration at its Best

The long-standing collaboration between ICPAC and the Cyprus University of Technology stands as a model of how professional bodies and academic institutions can work together for mutual benefit and the public good. By supporting this event year after year, ICPAC helps cultivate an environment where education and industry align, creating tangible opportunities for student growth, mentorship, and career advancement.

This synergy is especially relevant in today’s rapidly changing business environment, where skills such as critical thinking, integrity, digital readiness and

THE AWARDS CEREMONY SERVED NOT ONLY AS A PLATFORM TO CELEBRATE EXCELLENCE BUT ALSO AS A REMINDER OF THE ENDURING VALUE OF EDUCATION IN SHAPING SOCIETY.

sustainability awareness are more essential than ever. The Institute continues to advocate for an academic curriculum that reflects the evolving needs of the profession while preserving its ethical foundation.

Acknowledging Achievement, Inspiring Progress

The Awards Ceremony served not only as a platform to celebrate excellence but also as a reminder of the enduring value of education in shaping society. ICPAC congratulates all the students who were recognised and applauds their effort, determination, and academic discipline. Their success reflects both personal commitment and the quality of education delivered by the School of Business and Economics. The Institute also commends the faculty and administrative teams at CUT for their professionalism, dedication and partnership over the years. Together, we help build a future where knowledge, ethics and innovation form the pillars of economic growth.

Looking Ahead

As a forward-looking institution, ICPAC will continue to support initiatives that nurture talent, encourage excellence, and strengthen the links between the academic and professional worlds. The Institute remains steadfast in its role as a partner of educational institutions and a guardian of professional integrity, committed to shaping a resilient and competitive economy for the benefit of future generations.

IFAC President

Jean Bou q uot

Visits C y prus

High-Level Meetings Highlight Cyprus’ Strategic Role in Global Accountancy

The President of the International Federation of Accountants (IFAC), Mr. Jean Bouquot, paid an official two-day visit to Cyprus on 17–18 June 2025, following an invitation by the Institute of Certified Public Accountants of Cyprus (ICPAC). The visit marked a milestone in Cyprus’s efforts to strengthen its presence and influence within the global accounting and auditing landscape.

During his visit, Mr. Bouquot engaged in a series of high-level meetings with government officials, regulatory authorities, financial institutions, and academia, reaffirming IFAC’s strategic cooperation with Cyprus and acknowledging the country’s progress in promoting professional excellence, transparency, and financial integrity.

Day 1 – June 17, 2025

Meeting with the Governor of the Central

Bank of Cyprus

Mr. Bouquot met with Mr. Christodoulos Patsalides, Governor of the Central Bank of Cyprus, accompanied by the leadership of ICPAC, including the President of the Board, Mr. Nikos Chimarides, General Manager, Mr. Kyriakos Iordanou, and Head of Technical and Professional Matters, Ms. Eleni Assioti.

Discussions focused on Cyprus’ macroeconomic outlook, the regulatory evolution of the banking sector, and the growing need to embed environmental, social, and governance (ESG) standards into financial reporting. The role of technology and AI in enhancing

transparency, risk management, and combating economic crime was also explored.

Meeting with the Public Oversight Authority (PAOC)

The IFAC President held a separate meeting with the Chairman of the Cyprus Public Audit Oversight Board and Director General of the Ministry of Finance, Mr. Andreas Zachariades, and the Director General of CYPAOB and Chair of the CEAOB, Mr. Panos Prodromides.

The agenda included supervisory challenges in audit quality assurance, implementation of EU regulations, and global convergence of audit standards. The shared commitment to upholding professional ethics and public interest was reaffirmed.

Meeting with the Deputy Minister to the President

Mr. Bouquot was warmly received at the Presidential Palace by Deputy Minister to the President, Ms. Irene Piki. The meeting centered on Cyprus’s efforts to enhance its investment environment, public governance, and alignment with global transparency standards.

Ms. Piki highlighted the pivotal role of the accountancy profession in building economic credibility and emphasized the importance of international partnerships like that with IFAC.

Meeting with the ICPAC Board of Directors

Later that evening, Mr. Bouquot participated in a special meeting of the ICPAC Board, attended by managing partners of audit and advisory firms, committee chairpersons, and senior executives of the profession.

ICPAC President Mr. Nikos Chimarides presented the evolving challenges facing the profession in Cyprus, including the implementation of the EU’s Corporate Sustainability Reporting Directive (CSRD), attracting and retaining talent, and embracing digital transformation. Mr. Bouquot shared IFAC’s global strategy and discussed the future role of the profession as a trusted advisor in a rapidly changing world.

Day 2 – June 18, 2025

Meeting with the University of Cyprus Board Chairman

Mr. Bouquot met with the Chairman of the University of Cyprus Council, Mr. Tasos Anastasiou. The two discussed ways to strengthen collaboration between the academic and professional sectors, boost youth engagement in the profession, and promote innovation through joint initiatives.

The meeting reaffirmed the strategic importance of the Memorandum of Understanding between ICPAC and the University of Cyprus.

DURING HIS VISIT, MR. BOUQUOT ENGAGED IN A SERIES OF HIGH-LEVEL MEETINGS WITH GOVERNMENT OFFICIALS, REGULATORY AUTHORITIES, FINANCIAL INSTITUTIONS, AND ACADEMIA, REAFFIRMING IFAC’S STRATEGIC COOPERATION WITH CYPRUS AND ACKNOWLEDGING THE COUNTRY’S PROGRESS IN PROMOTING PROFESSIONAL EXCELLENCE, TRANSPARENCY, AND FINANCIAL INTEGRITY.

THE OFFICIAL VISIT OF THE IFAC PRESIDENT UNDERSCORED THE INTERNATIONAL RECOGNITION OF CYPRUS’ PROGRESS IN ALIGNING ITS PROFESSION WITH GLOBAL STANDARDS AND BEST PRACTICES. THE MEETINGS ALSO REAFFIRMED ICPAC’S ROLE AS AN ACTIVE AND CREDIBLE MEMBER OF THE GLOBAL ACCOUNTANCY COMMUNITY.

Meeting with the President of the House of Representatives

The IFAC President concluded his visit with a meeting at the House of Representatives with its President, Ms. Annita Demetriou, who is also President of the Democratic Rally Party.

Discussions focused on the institutional role of the profession in promoting accountability, ethical conduct, and financial discipline in the public and private sectors. Ms. Demetriou praised Cyprus’ professionals for their contribution to sustainable economic development and welcomed IFAC’s support in strengthening the country’s governance framework.

Cyprus as a Strategic Player in the Global Profession

The official visit of the IFAC President underscored the international recognition of Cyprus’ progress in aligning its profession with global standards and best practices. The meetings also reaffirmed ICPAC’s role as an active and credible member of the global accountancy community.

Through strong regulatory cooperation, strategic public-private partnerships, and an unwavering commitment to professional excellence, Cyprus is wellpositioned to shape the future of the profession, both locally and globally.

Leadership interventions and international recognition at ICPAC’s

64th Annual General Meeting

With the participation of highranking dignitaries from Cyprus and abroad, the 64th Annual General Assembly of the Institute of Certified Public Accountants of Cyprus (ICPAC) took place on Wednesday, 18 June 2025, at the Nicosia Municipal Theatre.

The event was honoured by the presence of the President of the House of Representatives, Ms. Annita Demetriou, and the President of the International Federation of Accountants (IFAC), Mr. Jean Bouquot.

The participation of Mr. Bouquot in a professional body’s general assembly in Cyprus marks a milestone in the growing international recognition of ICPAC’s work and its outward-looking engagement.

A strategic approach to contemporary challenges

In his opening address, ICPAC’s General Manager, Mr. Kyriakos Iordanou, analysed the geoeconomic challenges of the present era, with particular emphasis on the effects of ongoing geopolitical tensions and conflicts in the broader region.

He emphasized the importance of de-escalation and a return to stability and social normalcy as essential conditions for prosperity and the protection of the public interest.

Mr. Iordanou also emphasized the need to enhance the resilience of the Cypriot economy, focusing on four key

strategic pillars: supporting small and medium-sized enterprises, leveraging artificial intelligence, integrating sustainable development, and investing in ongoing professional development.

Regional strategy and international outlook

Mr. Iordanou showcased Cyprus’s role as a stable regional hub for dialogue and cooperation between Europe, the Middle East, and Africa. He outlined the importance of multilateral collaboration and institutional interconnectivity, reaffirming ICPAC’s commitment to enhancing international outreach and actively contributing to key public policy matters.

The goal, he emphasised, is the continuous elevation of the accounting and auditing profession within the evolving global landscape.

Presidency review and strategic milestones

From the podium of the General Assembly, the outgoing President of ICPAC’s Board of Directors, Mr. Nikos Chimarides, delivered a concise review of his tenure.

This period was marked by significant institutional reforms and strategic initiatives, including ICPAC’s active contribution to the national tax reform agenda, the embedding of ESG principles into the business environment, and the profession’s digital transformation.

THE EVENT WAS HONOURED BY THE PRESENCE OF THE PRESIDENT OF THE HOUSE OF REPRESENTATIVES, MS. ANNITA DEMETRIOU, AND THE PRESIDENT OF THE INTERNATIONAL FEDERATION OF ACCOUNTANTS (IFAC), MR. JEAN BOUQUOT.

Noteworthy highlights included the establishment of the CFO Society Cyprus – a modern platform for dialogue and professional networking – and the institutionalisation of the Mediterranean Finance Summit, which now operates as a regional forum for knowledge exchange and critical thinking.

Mr. Chimarides underscored the essential role of the accounting profession in promoting transparency and financial sustainability and stressed the need for the profession to maintain a leading presence in addressing contemporary challenges. He extended heartfelt thanks to the Board of Directors, committees, management, and staff for their unwavering support and cooperation.

International Recognition and Remarks by the IFAC President

In his address, IFAC President Mr. Jean Bouquot praised ICPAC’s progress in strengthening the professional and regulatory framework in Cyprus. He pointed to the consistent advancement of professional ethics, lifelong learning, and technological readiness, positioning ICPAC as a model of good practice on the global stage.

Mr. Bouquot noted that Cyprus represents a prime example of a small country with substantial international impact – a result of the high calibre of its human capital and the targeted strategic leadership of visionary professional bodies aligned with global compliance standards.

Messages from the State

In a message delivered on behalf of the President of the Republic of Cyprus, Mr. Nikos Christodoulides, by the Deputy Minister to the President, Ms. Irene Piki, the multifaceted and long-standing contribution of ICPAC to the Cypriot economy and society was emphasised.

The President highlighted the decisive role of the accounting profession in advancing good governance, transparency, and tax compliance, recognising ICPAC as a credible institutional partner of the State.

He also reaffirmed the Government’s steadfast commitment to continuing its collaboration with ICPAC, in the broader context of modernising the state, enhancing competitiveness, and achieving sustainable development.

Support from the Legislative Authority

The President of the House of Representatives, Ms. Annita Demetriou, underscored the importance of collaboration between the legislative branch and professional bodies such as ICPAC. She noted that such partnerships form a cornerstone of justice, social cohesion, and the pursuit of sustainable economic growth.

She expressed the Parliament’s appreciation for ICPAC’s substantive and constructive role as a technical advisor and institutional partner, especially in times of geopolitical uncertainty. She emphasised the Institute’s contribution to safeguarding the Cypriot economy and advancing the values of transparency and accountability.

A Renewed institutional role

This year’s Annual General Meeting highlighted ICPAC’s strengthened role as an institutional partner of the State and a catalyst for positive change in the profession.

With international recognition, technocratic expertise, and a strategic focus on innovation, the Institute is shaping the next cycle of actions with responsibility and a steadfast orientation toward the public interest.

Following the Annual General Meeting, a networking party took place at The Garden, offering attendees the chance to connect, exchange ideas, and enjoy the night in a lively setting.

Odysseas Christodoulou elected new President of ICPAC

Odysseas Christodoulou has been elected as the new President of the Board of Directors of the Institute of Certified Public Accountants of Cyprus (ICPAC). The new Board was constituted ahead of the ceremonial part of the Institute’s 64th Annual General Meeting.

Mr. Christodoulou, who previously served as Vice President of ICPAC, succeeds Mr. Nicos Chimarides following the completion of his term. Andreas Andreou was elected as the new Vice President. Mr. Andreou has served on ICPAC’s Board since 2015.

New ICPAC Board of Directors

• Odysseas Christodoulou - President

• Andreas Andreou - Vice President

· Andreas Avraamides - Member

· Marios Demetriades - Member

· George Hadjineophytou - Member

· Stavros Ioannou - Member

· Constantinos Kallis - Member

· Savvas Kleitou - Member

· Eliza Livadiotou - Member

· Ioanna Nicolaidou - Member

· Nicolas Shiakallis - Member

· Spyros Spyrou - Member

· Nicos Stavrou - Member

· Afxentis Zemenides - Member

Mr. Christodoulou brings more than 30 years of experience in accounting, finance, and professional education. He is currently the CEO of edBOS, the educational division of the eBOS technology platform, with a strong focus on innovation, upskilling, and workforce development.

A Fellow of the ACCA (FCCA), the Chartered Institute of Bankers (FCIB), and a Certified Management Accountant (CMA), Mr. Christodoulou holds an MBA in Accounting and Finance. He has served as Cyprus’ representative at the ACCA International Assembly and held senior roles, including co-founder and CEO of Globaltraining, COO and Board Member of EDEX, and Council Member of the University of Nicosia.

His early career includes positions at Coopers & Lybrand, Lombard NatWest Bank, and Cyprus Popular Bank. He currently serves on the Board of KEO Plc and has previously held non-executive board positions at Ancoria Bank and Laiki Financial Services.

Mr. Andreou is a Partner and Executive Committee member at Deloitte Cyprus, having joined the firm in 1997. He has extensive experience providing audit services to a broad range of public and private organizations, with specialisation in the insurance and financial services sectors.

He leads Deloitte Cyprus’ technical team on International Financial Reporting Standards (IFRS) and is a well-regarded speaker on technical accounting matters. A member of ICPAC’s Board since July 2015, he previously served on the Institute’s Accounting Standards Committee (2010–2014) and as its Vice Chair (2014–2015).

He holds a degree in Business Administration with a concentration in Accounting from the University of Cyprus and has been a member of the Institute of Chartered Accountants in England and Wales (ACA) since 2001. He is married and a father of three.

About Odysseas Christodoulou

About Andreas Andreou

Opening Address at the 64th ICPAC AGM

ICPAC held its 64th Annual General Assembly amidst a period of heightened warfare and military conflicts in our immediate and broader geographical region. Everyone hopes that these conflicts will soon come to an end, that human casualties will be minimized, and that the worst can be avoided on both a social and humanitarian level.

The events in the Middle East and Europe do not leave us indifferent or unaffected. Beyond the humanitarian aspect, they cause disruption and serious turbulence in the global geostrategic, political, economic, and business environment. Consequently, we continue to operate in a context of relative uncertainty and instability, remaining, however, vigilant for any new challenges that may arise.

For countries like ours, the best defence in such times is the strengthening of the national economy, the business base, and internal social infrastructures on one hand, and, on the other, the forging of international

strategic and commercial collaborations and alliances. This includes the attractiveness and trust that our country inspires in third countries and foreign investors. It is therefore extremely important to align their interests with those of our homeland.

Notably, the establishment of the Strategic Dialogue with the United States, the Republic’s diplomatic initiatives within and beyond the European Union, and the upcoming Presidency of the EU Council in the first half of 2026 are fundamental opportunities for our country.

As part of its internationalization and outward-looking strategy, this year, ICPAC had the great honor and pleasure of hosting Mr. Jean Bouquot, President of the International Federation of Accountants (IFAC), in Cyprus. This is the first time that a sitting President of our international federation attended our Annual General Assembly in person. This signifies IFAC’s interest in regional professional accountancy bodies like ICPAC, the importance our Institute may have in our geographical neighbourhood, and the good reputation ICPAC and the Cypriot profession enjoy at the international level.

Additionally, we were pleased to welcome to our AGM representatives from other foreign professional bodies, such as those from France and Lebanon, as well as diplomatic missions based in Nicosia, giving our assembly a distinctly international dimension.

From another perspective, one could safely argue that Cyprus has the potential to serve as a bridge for constructive cooperation between countries and peoples, as well as a springboard for business and commercial synergy among Asia, Africa, America, and Europe. As ICPAC, we are ready to contribute to these goals through our activities and networks, emphasizing that noble cooperation, a humanitarian approach, and our professional environment transcend any political or geostrategic considerations.

Kyriakos Iordanou General Manager, ICPAC

FOR COUNTRIES LIKE OURS, THE BEST DEFENCE IN SUCH TIMES IS THE STRENGTHENING OF THE NATIONAL ECONOMY, THE BUSINESS BASE, AND INTERNAL SOCIAL INFRASTRUCTURES ON ONE HAND, AND, ON THE OTHER, THE FORGING OF INTERNATIONAL STRATEGIC AND COMMERCIAL COLLABORATIONS AND ALLIANCES.

The Accounting Profession’s Role and Contribution ICPAC and the accountancy profession face their challenges. Our activities span three main pillars:

As a professional body that supports, serves, and educates its members.

As a competent supervisory authority, exercising institutional supervisory responsibilities assigned by the State.

As a productive stakeholder of the economy and society, supporting the State, the private sector, and the broader financial industry.

Our profession plays a multifaceted, multidimensional, and indispensable role in every form of business and corporate operation. Backed by knowledge, training, expertise, specialization, and capability, professional accountants are among the most vital levers in the productive machinery of the economy.

The work and the professional opinions we provide are essential and decisive both for the functioning of all companies and for their compliance with their legal obligations. The same applies to the smooth operation of capital markets, development projects, the financial sector, and corporate viability.

Moreover, the work of our sector contributes to the collection of taxes and other state revenues, the effective financial management of public finances and budgets, and the preparation of reliable financial information. It also plays a crucial role in the sound operation of companies and the management of insolvency cases, to the benefit of creditors and state funds.

Simultaneously, the professional accountant is instrumental in both attracting and continuously servicing foreign investments and international businesses through the provision of professional and corporate services.

ICPAC members serve as financial managers across the market and the public sector, ensuring their sustainable operation and growth. Accounting firms also serve as gatekeepers and protectors in matters of compliance.

In general, the professional accountant is the essential hub and conduit between businesses and employers, the State and its services, banks, and the real economy in all its forms. We operate across the full spectrum of social and business activity, granting us broad perspective, objectivity, and specialized insight.

ICPAC MEMBERS SERVE AS FINANCIAL MANAGERS ACROSS THE MARKET AND THE PUBLIC SECTOR, ENSURING THEIR SUSTAINABLE OPERATION AND GROWTH. ACCOUNTING FIRMS ALSO SERVE AS GATEKEEPERS AND PROTECTORS IN MATTERS OF COMPLIANCE.

A cornerstone of our identity is continuous education and training, interpreted as life-long learning, both for our current and prospective members. This is achieved through various initiatives and broad connections with academia, educational organizations, and international bodies, both within the accountancy field and beyond.

At the same time, ICPAC undertakes targeted actions to inform and educate students and citizens on financial literacy, ethics, and tax awareness.

In conclusion, the accountancy sector and our profession are among the most internationalized domains in Cyprus. Since 1981, we apply the International Accounting Standards and IFAC’s Code of Ethics. We maintain an active presence in European, regional, and global federations to which we belong, deriving knowledge and best practices through international cooperation. A solid proof of that is the fact that all the major international accounting networks have a presence in Cyprus for decades.

Over these 64 years in the public and economic arena, ICPAC continues to operate on robust foundations, inspiring trust, credibility, and value.

As a pillar of the economy, ICPAC and our profession are always available to assist the State with constructive and substantial contribution to a wide range of initiatives and priorities, including:

• The restoration and strengthening of the country’s credibility and reputation.

• The promotion of necessary structural reform initiatives.

• The implementation of the national long term growth strategy “Vision 2035”.

• The Tax reform.

• The expansion of the country’s economic capacity through support for local SMEs and start-ups.

• The attraction of foreign businesses for genuine physical presence in Cyprus.

• The enhancement of the overall compliance landscape of the country.

• The repatriation of talented Cypriots who work and thrive abroad.

Our future has a name: Technology, Sustainable Development, and Competitiveness. ICPAC and the accounting profession align with digital transformation, preparing for the use of artificial intelligence and its potential implications for the work environment as we know it today. Sustainable development is not only about the EU Green Deal, but also about encompassing the 17 UN Sustainable Development Goals.

The competitiveness of our country will determine our economic size, commercial relevance, and productive potential. We are pleased to see the EU shifting in this direction, and we can build upon the Draghi Report.

ICPAC continues to move forward with the strength given by its members, extending a hand of friendship and cooperation to all institutions, the State, the Parliament, the private sector, and academia. It remains committed to best serving its members, the business community, the economy, society, and the public interest.

Address by the President of the House of Representatives, Ms. Annita Demetriou

The Value of Collaboration in Times of Uncertainty

Following the remarks made by the previous speakers, I would like to highlight a point of utmost importance: the power of collaboration. In an era marked by uncertainty and insecurity, the most critical task before us is to work together proactively to confront the challenges we face. That is the essence of our collective responsibility.

We have come to realise not just today, but in recent years as well, that so-called external factors do not simply pass us by. They are present, and they affect us all. The real challenge for each country is to find effective ways, through deliberate actions, to filter these influences, to stay ahead of developments, to compete, and ultimately to move forward. This is how we shield our economy and, just as importantly, a system that is often demanding and complex, as you, the professionals in this field, know far better than I do.

A Modern Legislative Framework that Supports Professionals

Earlier today, in conversation with the President of the International Federation of Accountants, we touched on a challenge that we must meet successfully: the legislative framework. Over the years, Cyprus has made significant progress in this regard. Our goal must always be to facilitate the ability of professionals to meet the evolving demands of the industry.

At times, this is far from easy. We are living in the digital age, and this reality brings with it an entirely new set of demands. It is therefore essential that we provide professionals with the right tools and resources to help them adapt. These requirements are often not only numerous but also more complex and demanding than those faced in other countries, whether within Europe or beyond.

Supporting the Profession for a Resilient Economy

Let me stress once again how important it is that we invest in supporting the accounting profession through sound legislation, through digital transformation, and above all, through strategic partnerships. In doing so, we not only empower professionals to succeed in their roles but also contribute to building a more resilient and future-ready economy.

A Privilege to Join You in a Noteworthy Gathering

It is with great pleasure that I join you today to address the 64th Annual General Assembly of the Institute of Certified Public Accountants of Cyprus an event that coincides with the presence of distinguished professionals from both the national and international arenas. I sincerely thank you for the invitation to be here with you.

WE ARE LIVING IN THE DIGITAL AGE, AND THIS REALITY BRINGS WITH IT AN ENTIRELY NEW SET OF DEMANDS. IT IS THEREFORE ESSENTIAL THAT WE PROVIDE PROFESSIONALS WITH THE RIGHT TOOLS AND RESOURCES TO HELP THEM ADAPT.

A Longstanding Partner of the State and Parliament

Since its establishment in 1961, ICPAC has made a significant contribution to the development of both the Cypriot economy and society. As one of the strongest professional associations in Cyprus, ICPAC has been an exemplary advisor and partner to the State, and an important stakeholder for the House of

Representatives, actively participating in consultations concerning the operational and legislative framework of the Republic, particularly in matters relating to the economy.

With the enactment by the House of Representatives of Law 76(I)/2001, aligning national legislation with EU law, ICPAC was officially designated in 2002 as the competent authority for the regulation and oversight

LET ME STRESS ONCE AGAIN HOW IMPORTANT IT IS THAT WE INVEST IN SUPPORTING THE ACCOUNTING PROFESSION THROUGH SOUND LEGISLATION, THROUGH DIGITAL TRANSFORMATION, AND ABOVE ALL, THROUGH STRATEGIC PARTNERSHIPS.

of the accounting profession in Cyprus. Undeniably, ICPAC stands as a model professional body one that adheres to international standards while ensuring the necessary level of regulation and supervision, promoting the highest professional values, and serving the public interest.

Resilience Amidst Geopolitical and Economic Challenges

In recent years, both ICPAC and the State have been called upon to navigate the complex consequences of the sanctions and restrictive measures imposed by the European Union on Russia following its invasion of Ukraine. These include inflationary pressures, rising interest rates, supply chain disruptions, and escalating energy costs.

Despite these challenging circumstances, ICPAC has continued to operate with integrity within Cyprus’s economic and social fabric, reinforcing its credibility and, by extension, strengthening the institutions it works with. It would be unthinkable for us—as the Legislative or Executive branch—to disregard the challenges faced, or those anticipated, by the professionals in this sector.

A Pillar of Support for Business Viability and Growth

ICPAC’s initiatives—including the advancement of a Cyprus Financial Reporting Standard for small enterprises, partnerships with professional and academic institutions both domestically and internationally, its engagement with the Registrar of Companies on relevant matters, and its monitoring of EU directives and regulations—underscore its decisive contribution to safeguarding business viability and strengthening entrepreneurship.

As a key pillar of our financial ecosystem, ICPAC plays a leading role in shaping economic developments in Cyprus. Through its consistent and meaningful presence, its well-targeted interventions—especially on high-priority economic issues—and its authoritative voice, the Institute continues to help chart a course for sustainable and responsible financial progress.

Strengthening Cyprus’ Competitiveness and International Standing

In doing so, the Institute contributes to enhancing the competitiveness of the Cypriot economy and promoting our country as a leading international business centre. Moreover, just as the outgoing President and Vice President of the Board of Directors have

demonstrated in their roles, I am fully confident that the new President and Vice President will continue the Institute’s mission with the same consistency, commitment, and sense of responsibility. Their leadership will continue to offer scientific support and technocratic insight whenever and wherever it is deemed necessary.

Stability as the Foundation for Sustainable Development

Economic stability is a fundamental prerequisite for sustainable growth, the preservation of social cohesion, and the strengthening of trust among both citizens and investors. A stable economy enables a predictable environment for business, ensures the effective functioning of institutions, and builds resilience against external shocks.

At present, in addition to the ongoing conflict in Ukraine and other global crises, our already troubled region is once again facing turmoil—this time in the Middle East.

Vigilance and Strategic Preparedness

We cannot afford to become complacent. On the contrary, we must remain vigilant, safeguard macroeconomic stability, and take timely action to shield our economy from external threats. In this collective effort, the Institute of Certified Public Accountants of Cyprus (ICPAC) is undoubtedly a key ally and partner.

The real challenge is to make both Cyprus and, more broadly, the European Union genuinely competitive. We must ensure that professionals are supported in implementing the policies we adopt, while also contributing to the broader objective of economic stability.

Upholding the Credibility of Cyprus

The credibility of our country is critical for attracting and managing investment, and not only that. Deliberate behaviours or narrow interests that undermine Cyprus and the hard-earned progress we’ve made over the years can no longer be tolerated. We all have a role to play in protecting and advancing the reputation and integrity of our nation. And that includes you.

The Role of ICPAC in the Tax Reform Dialogue

Earlier, there was mention of the topic of tax reform and the importance of government intervention in this domain. Indeed, such reform is necessary, but it must be carried out in a manner that considers the views of professional stakeholders such as ICPAC.

As the House of Representatives, we await the relevant bills as soon as possible. Ideally, these will reflect a balanced synthesis of views that allows us to move forward in a meaningful way. I can assure you that we are ready and willing to support this process.

Acknowledging the Contribution of ICPAC

We must not forget that some institutions in this country, such as ICPAC, have “shouldered the burden” to get us where we are today. Their role has been pivotal.

We are indeed pleased that Cyprus has regained investment grade status. However, we must remain clear-eyed: economic stability is not a given. In today’s world, the only certainty is uncertainty.

Moving Forward with Vision and Determination

We are called upon to move forward with clear goals, with determination, and with foresight to shield our economy and protect the public interest.

We, as the House of Representatives, will continue to stand by your side. We need a long-term strategic plan, and we are ready to work decisively alongside you to implement it, because at the end of the day, it is not just you who benefits. We all do. Cyprus benefits. Every citizen, individually and collectively, stands to gain.

Address by the President of the Republic of Cyprus, Mr. Nikos Christodoulides

Delivered by the Deputy Minister to the President, Ms. Irene Piki

It is with great pleasure that I address today the 64th Annual General Assembly of the Institute of Certified Public Accountants of Cyprus—an essential partner of the State in one of the most critical areas of public life: the economy.

Your Institute is a longstanding institution that has consistently contributed to our country. You have stood by Cyprus at every crucial turning point of its economy and have been key partners in every national effort towards progress and stability. The presence today of Mr. Jean Bouquot, President of the International Federation of Accountants, is a tangible recognition of ICPAC’s high professional standards and the international respect commanded by the Cypriot accounting and auditing profession.

A Valued Institutional Counterpart in Policymaking

As a government, we deeply value and acknowledge the role of ICPAC as a key institutional counterpart, one that actively participates in public dialogue with responsibility and well-documented contributions. Your input, especially in reforms, has always been meaningful and constructive.

A Demanding and Uncertain International Context

We are currently experiencing an exceptionally demanding period, full of uncertainty. Armed conflicts in our wider neighbourhood, tensions with both regional and global dimensions, and a constantly shifting international reality, all contribute to a climate of increased pressure for states, markets, businesses, and institutions alike.

Within this context, the Eastern Mediterranean is regaining strategic importance in terms of security, regional cooperation, and the promotion of stability. Cyprus today faces a dual challenge: on the one hand, to remain a stable and credible partner in the region; and on the other, to ensure that, domestically, the necessary conditions for economic resilience, social cohesion, and institutional continuity are maintained.

Building Economic Resilience through Stability and Trust

Market disruptions, inflationary pressures, challenges in global supply chains, and high energy costs serve as daily reminders that prosperity cannot be taken for granted. We must pursue policies that strengthen the credibility of the country, safeguard macroeconomic stability, and foster trust among citizens, markets, and our strategic partners.

The government, fully aware of the challenges ahead, is working methodically and with clear targets to

AS A GOVERNMENT, WE DEEPLY VALUE AND ACKNOWLEDGE THE ROLE OF ICPAC AS A KEY INSTITUTIONAL COUNTERPART, ONE THAT ACTIVELY PARTICIPATES IN PUBLIC DIALOGUE WITH RESPONSIBILITY AND WELLDOCUMENTED CONTRIBUTIONS. YOUR INPUT, ESPECIALLY IN REFORMS, HAS ALWAYS BEEN MEANINGFUL AND CONSTRUCTIVE.

maintain stability and further enhance the resilience of our economy. Cyprus must and can remain an island of reliability amidst a landscape of growing international complexity.

A Strong Economic Performance Despite Global Uncertainty

Despite the volatile global environment, the Cypriot economy continues to post notable results: a growth rate of 3.4% in 2024, a return to investment-grade rating “A” by international credit rating agencies, historically low unemployment rates, and a continuing decline in public debt.

Safeguarding the Economy Through Reform and Resilience

We understand external factors can easily disrupt economic balance. That is why we are working consistently to shield our economic institutions, fiscally, and structurally. At the heart of our efforts lie major reforms.

A Fair, Simple, and Competitive Tax System

The tax reform promoted by the Government is the first comprehensive overhaul of the system in over two decades. Our ambition is to establish a fair, simple, efficient, and competitive tax system — one that meets the demands of a new era and serves as a lever for economic development and social policy.

The Vital Role of ICPAC

In this endeavour, the role of the Institute of Certified Public Accountants of Cyprus (ICPAC) has been pivotal. ICPAC has submitted well-documented proposals, actively participated in the consultation process, and maintained a responsible and constructive stance, contributing decisively to the refinement of the reform proposals. I would like to sincerely thank you for your institutional contribution.

Timeline and Legislative Process

We are now in the final stage of preparing the relevant bills, intending to submit them to Parliament in the

coming period. The goal is for the new framework to come into effect on 1 January 2026.

Strengthening Institutions and State Accountability

Tax reform is part of a broader set of institutional reforms aimed not only at strengthening economic resilience but also at enhancing the credibility, transparency, and accountability of the state.

Regulatory Overhaul: Supervision and Compliance

Within this context, the Government is moving forward with interventions that touch upon the core of supervision and compliance. The establishment of a Unified Supervisory Authority for administrative service providers, with the aim of consolidating and strengthening the regulatory framework, represents a key step towards addressing distortions observed in the past.

At the same time, the creation of a National Sanctions Unit under the Ministry of Finance — for which relevant bills are already under discussion in Parliament — responds to the need for a specialised mechanism to ensure Cyprus’ alignment with international and EU sanctions regimes.

Reinforcing Cyprus as a Rule-of-Law State and Business Hub

These initiatives are fundamental shifts aimed at reinforcing Cyprus as a state governed by the rule of law, strengthening its institutional framework, and upgrading the country’s image as a reliable and secure business destination.

Strategic Repositioning on the Global Stage

In tandem with these institutional reforms, we have launched the first organised international campaign to reposition Cyprus globally. This campaign is not limited to communication or promotion but reflects the Government’s reform-driven will, the tangible changes taking place in our country, and our strategic goal to establish Cyprus as a modern, reliable, and competitive business hub.

This is an effort grounded in real data — in reforms being implemented, institutions being reinforced, and frameworks being modernised.

Accountants and Auditors: Pillars of Economic Credibility

In this effort, the contribution of your profession is crucial. Accountants and auditors in Cyprus, as carriers of expertise, transparency, and professional integrity, form the backbone of the international operations of our economy and serve as valuable ambassadors of the country’s credibility.

U.S. Mission: Promoting Cyprus as a Gateway and Tech Hub

The first key initiative of this campaign was my visit last April to the United States, with stops in New York, Houston, and Silicon Valley.

During this mission, Cyprus’ potential role as a regional gateway and technology hub was showcased. At the same time, we promoted collaborations with universities, investment funds, and leading private sector organisations.

Strengthening Cyprus–United States Relations Through Strategic Dialogue

This mission forms part of the broader framework for upgrading Cyprus–United States relations, which, since the establishment of the Strategic Dialogue in October 2024, has evolved into a coherent cooperation framework in areas such as security, energy, technology, civil protection, and economic collaboration.

This is a strategic outward-looking policy choice of our government, one that enhances the international standing of the Republic of Cyprus, expands the potential for cooperation with strategic partners, and reaffirms Cyprus as a reliable interlocutor and stable partner in an increasingly uncertain global environment.

A Historic Milestone in Cyprus–India Relations

In the same direction, the recent official visit of the Prime Minister of India to Cyprus marked a historic milestone in the relations between our two countries.

As part of the visit, and in the presence of Prime Minister Modi, a dialogue was held with distinguished entrepreneurs from Cyprus and India. This exchange highlighted significant prospects for strengthening investment flows and, more specifically, for establishing the presence of two additional Indian companies in Cyprus, leveraging our country as a bridge to the European market.

The Global Challenge of Talent Attraction and Retention

Before concluding, I would like to address another growing global challenge that directly affects our businesses: the attraction and retention of talent. Cyprus no longer competes solely based on its favourable investment climate. Increasingly, competitiveness depends on the quality and availability of its human capital. Our ability to attract, repatriate, and utilise highly skilled professionals is a critical factor for the country’s long-term competitiveness.

“Minds in Cyprus”: A Strategic Campaign for Talent Repatriation

In this context, the Government is implementing the “Minds in Cyprus” initiative — a targeted strategic campaign aimed primarily at Cypriots abroad with high levels of expertise. The objective is to encourage their repatriation and integration into the productive fabric of our economy.

This effort is part of a broader set of policies to promote knowledge, specialisation, and added value — elements that are essential for the sustainability of our economy.

I am confident that you are all too familiar with the challenges of attracting high-quality talent. That is why we believe this initiative will yield a positive impact, including within the accounting and auditing profession.

A Consistent and Forward-Looking Policy Agenda

The Government is moving forward with consistency and determination, guided by a coherent plan that addresses present-day challenges while investing in the opportunities of tomorrow. We do not underestimate the difficulties, nor do we overlook the pressures faced by businesses, professionals, and households. On the contrary, through institutional reinforcement, economic stability, and an outward-looking strategy, we are laying the foundations for a more resilient, modern, and competitive state.

Working Together for a Stronger, More Dynamic Cyprus

In this effort, our collaboration with institutions such as the Institute of Certified Public Accountants of Cyprus (ICPAC) acquires particular significance. We are inspired by the seriousness with which you engage with developments, the sense of responsibility you bring to public dialogue, and your steadfast commitment to the progress of our country.

I would therefore like to once again extend my sincere gratitude for your longstanding contribution and steadfast presence as partners in Cyprus’ journey towards a fairer, more dynamic, and more optimistic future.

Speech by Jean Bouquot, President of the International Federation of Accountants (IFAC)

Delivered at the 64th Annual General Assembly of the Institute of Certified Public Accountants of Cyprus (ICPAC)

Iam Jean Bouquot, President of IFAC, the International Federation of Accountants.

Thank you for welcoming me to Nicosia. It’s my first time in your country, and I have been truly grateful for the warm welcome I’ve received from everyone I’ve met, especially my hosts at ICPAC.

Let me briefly introduce IFAC to those who are not familiar with it.

We are the global organization of the accountancy profession. We represent millions of professional accountants through our 187 member organizations across 142 jurisdictions.

The value we bring to our members has three parts:

• Connection and Unity

• Integrity and Global Recognition

• A Collective Voice and Commitment to the Public Interest

Everything we do at IFAC is possible only with the collective efforts of our member organizations. ICPAC became a founding member of IFAC in 1977, and we have been proud to work with you ever since.

We have also benefited greatly from the volunteer service of talented ICPAC members over the years, including Eleni ASHIOTI, a current member of our Small- and Medium-Sized Practices Advisory Group.

I thank you all for the essential work you do on behalf of our profession and the public interest.

I want to say a few words today about three areas that are high on our agenda at IFAC, and which have been discussed nearly everywhere I have travelled as IFAC President: sustainability, digitalization, and public financial management.

Sustainability

Starting with sustainability.

In recent years, we at IFAC have been talking to our colleagues across the global accountancy profession— and to regulators and other stakeholders outside of the profession—about the opportunity and the public interest responsibility that professional accountants have for enabling the sustainability transformation that is happening in companies, in our economies, and society.

IFAC has unique contributions to make to these efforts in our role as both the profession’s global voice and as its global convener. I believe this is a critical role. The accountancy profession, as a trusted and influential public interest profession, should have a clear voice in how society can best undergo the sustainability transformation. And within the profession, we need to engage with each other through active, ongoing dialogue and support each other’s efforts by exchanging best practices and resources.

Financial markets need trustworthy, high-quality sustainability information so that investors and lenders can make efficient decisions that align with sustainability targets. A wider range of stakeholders in society also need this information so that they can fully understand the sustainability impacts of a business.

We are the profession in the best position to lead on sustainability reporting and assurance:

• We have the technical skills to integrate financial and non-financial information.

• Wherever we are in the value chain, we have the skills to transform high-quality standards into high-quality information.

• Our reputation will bring trust to this information, in the same way that we bring confidence to traditional financial statements.

SPEECH BY JEAN BOUQUOT, PRESIDENT OF

The sustainability transformation does call for individual professionals to upskill and reskill and collaborate with experts as needed to complement our work. PAOs are the best sources of the education and training their members need, so PAOS need to move swiftly and boldly with their members into the sustainable future. This will take a lot of hard work, and there will be bumps in the road on every PAO’s journey, but it’s imperative to keep going.

I want to recognize ICPAC for the great things you are doing for your members, including your webinars and CPD training on the ESRS. These are useful for professionals at any stage of their progress with sustainability, from their first steps. And with events like the 2024 ICPAC-ACCA Sustainability Conference, you are convening leaders in the profession to bring international best practices to Cyprus. I strongly encourage ICPAC members to take advantage of these resources and opportunities.

As a profession, we are challenging those of us who work inside companies, or who provide advisory services to companies, to view new sustainability disclosures not as a compliance exercise, but instead, as

empowering change in the way that companies are governed and the way they make decisions.

We are challenging ourselves to do everything we can to help build a harmonized, global system for reporting sustainability-related information. Crucially, for these disclosures to be useful to anyone, no actor can be outside the reporting system.

My focus, as President of IFAC, is on sustainability as it relates to all professional accountancy organizations within Europe, but also beyond Europe. We believe the IFRS standards, starting with S1 and S2, are the right foundation for this system. We welcome all well-intentioned initiatives for sustainability reporting standards, while strongly encouraging alignment. Ultimately, we are all on the same sustainability journey, so we should embark on it together.

We also believe widespread adoption and implementation of the ISSA 5000 standard, of the International Auditing and Assurance Standards Board (IAASB), will be crucial for ensuring that sustainability assurance truly builds trust and confidence in sustainability information.

ISSA 5000 is a profession-agnostic standard that allows for a broad range of assurance providers while maintaining a high level of quality. But I want to emphasize that we should not allow a two-tiered system to emerge—one where regulated, professional accountants are held to higher standards, while others operate without consistent oversight. It is all about investor and consumer protection. If the market for sustainability assurance doesn’t earn trust, then it doesn’t serve its intended purpose.

As with sustainability disclosure, all countries need to converge on a unified approach to sustainability assurance early on, before regulatory fragmentation can take hold and create unnecessary costs and complexity. Resolving a fragmented system only gets more difficult as time goes on.

The accountancy profession in Cyprus should speak strongly in favour of the adoption and implementation of ISSA 5000 as the path forward on sustainability assurance.

For our part, as individual professionals, we need to be ready to meet market expectations in the assurance space—and to compete with non-professionals.

Digitalization

I also want to offer you a view from the global level and a few thoughts on how digital technologies—especially artificial intelligence—are changing our profession, and how we should adapt.

AI is revolutionizing the way accountants and auditors work—in ways that enable us to process and analyse vast amounts of data with greater speed, accuracy, and impact.

For example, auditors can leverage AI to uncover hidden patterns, correlations, and insights, and these outputs can support predictive analytics, risk evaluation, and fraud detection. Generative AI is also proving to be a valuable tool for drafting audit reports and distilling complex information.

But perhaps the biggest changes are happening outside of formal systems and processes—in emails and spreadsheets, in team meetings, in presentations, and in countless one-off tasks that AI is transforming.

We have an incredible opportunity. We can use AI to shift from scorekeeping to strategy; to create more time to do higher-value work; and to participate in the transformation of our profession, rather than resist it.

WE ARE CHALLENGING OURSELVES TO DO EVERYTHING WE CAN TO HELP BUILD A HARMONIZED, GLOBAL SYSTEM FOR REPORTING SUSTAINABILITY-RELATED INFORMATION. CRUCIALLY, FOR THESE DISCLOSURES TO BE USEFUL TO ANYONE, NO ACTOR CAN BE OUTSIDE THE REPORTING SYSTEM.

The profession’s real challenge is not whether we can use AI—it is whether we will redefine our work before others redefine it for us.

I must add that we should always consider our professional responsibilities to meet the new and still emerging risks of AI, including cybersecurity, threats to privacy, lack of transparency, and bias within AI models.

I fully recognize that some in our profession feel anxious about how AI might impact our relevance. I want to emphasize that overall, AI is an opportunity to add more value and increase our relevance. But we should consider carefully whether we are prepared to seize this opportunity. The core skills of a professional accountant are strong, and we do not need to reinvent ourselves, but we must build on those skills.

Individually, we will need to increase our digital literacy and get practical experience with AI. As with sustainability, PAOs need to support their members to upskill and reskill for AI and a range of other digital competencies—and I encourage everyone to stay engaged with what ICPAC is doing, such as the training held in April on AI risks and compliance under the new EU AI Act.

PAOs also need to engage with educational institutions to make sure the curriculum for accounting students is keeping pace with technological change. IFAC’s International Panel on Accountancy Education oversees the International Education Standards—the global baseline for accountancy education—and ensures they remain relevant in a rapidly evolving world. Right now, the Panel is exploring the AI competencies that future accountants will need and how AI is reshaping the learning process.

On education, ICPAC’s continuing engagement with stakeholders on behalf of its members is vital to a successful digital transformation of the profession in Cyprus.

SPEECH BY JEAN BOUQUOT, PRESIDENT

PUBLIC FINANCIAL MANAGEMENT

The third and final theme I will turn to is public financial management, or PFM.

Public officials around the world are reckoning with an uncertain environment. They have very difficult decisions to make about how to use their limited resources to preserve and advance the welfare of their citizens. There is little margin for error. They need robust plans that account for the full scope of public needs and respond to them effectively, comprehensively, and sustainably. And all of this leads to PFM.

The issue of cash versus accrual-based accounting is an exceptionally important issue within PFM. It has a great effect on the public sector’s ability to plan, develop, and deliver services, and to manage its balance sheets. It is a top priority for IFAC and the IPSASB, the International Public Sector Accounting Standards Board.

This is a journey Cyprus is already on—but I want to revisit why you must keep going.

Accrual accounting is known to increase transparency, accountability, and credibility in public finances. This means better information reaches decision makers in the public sector. Better decisions lead to better outcomes in the management of public resources and the delivery of public services. With greater transparency and better outcomes of these decisions, public trust in government will rise.

IFAC offers a free-to-use tool on our website called Pathways to Accrual. It features resources to help governments and other public sector entities forge their paths towards adopting and implementing accrualbased reporting frameworks.

On PFM, I want to add that the most important variable in the public sector is people. So, I encourage our profession to convey a few key points to their stakeholders in government: public sector finance positions should be professionalized; they should have robust qualification requirements; and they should be attractive and competitive for professionals who also have private sector opportunities.

Conclusion

Within each of the three themes I’ve discussed today—sustainability, digitalization, and public financial management—our profession has a major strategic role and an obligation to lead the way in collaboration with our stakeholders.

I want to mention one more thing: our profession’s fundamental purpose of serving the public interest. The quality that enables us to do so, which sets us apart, is professional ethics. Our ethics define us and have earned us our trusted reputation and the central position we occupy in economies, financial markets, and organizations. At all times, we need to keep earning our trusted reputation and never take it for granted.

Speech by Nicos Chimarides President of ICPAC

It is with great honour and satisfaction that I welcome you to the 64th Annual General Assembly of the Institute of Certified Public Accountants of Cyprus.

I would also like to express our sincere pleasure at the presence of the Speaker of the House of Representatives, Mrs. Annita Demetriou. Our cooperation with the Parliament has always been excellent, and our personnel possess specialised knowledge and expertise, always at your disposal for the joint effort of developing a legislative framework that will promote economic growth with both speed and sustainability. Mrs. Demetriou, we warmly welcome you.

With great honour, we welcome for the first time in the history of our Institute the President of the International Federation of Accountants (IFAC), Mr. Jean Bouquot. Your presence here is a clear recognition of the important and elevated role that ICPAC holds at both national and international levels. It also confirms the dynamic path of outward orientation, institutional strengthening, and global recognition that we have charted in recent years. Welcome, Mr. Bouquot.

Finally, we are pleased to welcome the Chairman of the Committee of European Auditing Oversight Bodies (CEAOB) and a friend, Mr. Panos Prodromidis. Congratulations on your election to this highly significant position. Your advancement is a landmark not only for the auditing profession but also for the broader effort to enhance Cyprus’ image at European and international levels. Panos, we sincerely thank you and wish you every success in your new responsibilities.

The ongoing developments make this year’s Assembly particularly critical and decisive, not only for the future of the accounting profession but also for the overall trajectory of our country. In a period, full of challenges but also significant opportunities, the Institute of Certified Public Accountants of Cyprus stands with stability, responsibility, and determination at the forefront of these developments.

This current juncture is both a source of pride and a heavy responsibility for us, as it highlights ICPAC as a reliable and dynamic institution that plays a decisive role in shaping a modern, transparent, and competitive professional environment. With a vision firmly set on the future and through collective effort, we continue to promote progress and innovation, while simultaneously safeguarding the interests and credibility of the accounting profession, both within the Republic of Cyprus and on the international stage.

Strong economic performance amid global uncertainty

In 2024, the Cypriot economy recorded a growth rate of 3.4%, one of the highest in the European Union. This positive momentum continues into 2025, with the first quarter showing a growth rate of approximately 3%. The labour market is characterized by near full employment, while public debt has significantly decreased, approaching 60% of GDP. At the same time, inflation is on a downward trend, nearing the 2% target set by the European Central Bank.

IN

A PERIOD, FULL OF CHALLENGES BUT ALSO SIGNIFICANT

OPPORTUNITIES,

THE INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS OF CYPRUS STANDS WITH STABILITY, RESPONSIBILITY, AND DETERMINATION AT THE FOREFRONT OF THESE DEVELOPMENTS.

As a result of the above, the continuous credit rating upgrades of the Republic of Cyprus have placed our country in the A category, confirming the reliability and stability of our economy.

It is important to note that these achievements are realized despite serious geopolitical and economic challenges, such as the ongoing crisis in Ukraine and the unstable situation in the Middle East, combined with a global economy and Europe facing recessionary pressures amid heightened uncertainty. The International Monetary Fund forecasts that the current decade will be the worst for global economic growth rates since the 1960s, averaging approximately 2.5%.

These challenges are even more pronounced for small and open economies like Cyprus, which are particularly vulnerable to external economic shocks and geopolitical turmoil. In this context, there is no

room for complacency; the continuous strengthening and safeguarding of the economy remains an integral and critical objective to ensure sustainable growth and stability.

Twelve months of remarkable progress in Cyprus-India relations

I clearly remember that exactly one year ago, after last year’s General Assembly, we had the opportunity to discuss India and the great expectations surrounding the further deepening of our cooperation. Among the topics raised were the simplification of visa issuance procedures for Indian entrepreneurs, the possibility of establishing direct flights, as well as efforts to strengthen collaboration between the governments of the two countries.

From the outset, I was optimistic about the prospects of seeing major Indian companies operating in Cyprus and, through Cyprus, expanding further into the European market. However, even in the most optimistic scenarios, I had not anticipated the speed and breadth of progress we have recorded in just 12 months. I would like to extend my sincere thanks to you personally, to the Minister of Foreign Affairs, the Deputy Minister to the President, the Deputy Minister of Tourism, the CyprusIndia Business Association, Invest Cyprus, as well as all public services and private sector entities who work diligently to attract investment from India.

These investments are having an immediate positive impact on the tourism sector, the further development of the technology ecosystem, and many other critical sectors of the Cypriot economy. Although significant work still lies ahead, this progress exemplifies the effectiveness achieved when vision, determination in implementation, and close cooperation between the public and private sectors are present.

I am confident that with sound planning and continuous coordination, we will be able to move forward even more decisively—not only with India but also with the United States of America, where we are already observing gradual returns on our efforts, as well as with countries in the Middle East, Greece, and other European markets. Cyprus remains a stable and investor-friendly destination, offering strategic advantages for business expansion across the wider region.

Sustaining and Enhancing Cyprus’s International Competitiveness

However, maintaining and enhancing the international competitiveness of the Cypriot economy cannot be taken for granted or considered self-evident. Particularly considering the challenges facing global trade and the sluggish growth of the world economy, there is an urgent need for continuous and targeted reform actions. In brief, these include:

1. Continuing a systematic international campaign to restore and strengthen Cyprus’s global reputation.

2. Adopting decisive and comprehensive reform measures that improve the business environment.

CYPRUS IS NO LONGER MERELY A REGIONAL PLAYER WITHIN THE EUROPEAN TECHNOLOGY LANDSCAPE; IT HAS EMERGED AS A GROWING FORCE, BOASTING ONE OF THE HIGHEST GROWTH RATES IN THE TECHNOLOGY SECTOR OVER THE PAST DECADE. THIS SUCCESS IS ATTRIBUTED TO A COLLECTIVE COMMITMENT, TALENT, AND DETERMINATION TO ADOPT A DIVERSIFIED ECONOMIC MODEL THAT EMPHASISES INNOVATION.

3. Ensuring proper and modern legislation that promotes transparency and efficiency.

4. Strengthening the stability and reliability of institutions.

Within this critical framework, ICPAC emerges as a fundamental pillar and catalyst for the country’s economic stability and integrity. Through its expertise, professional ethics, and contributions, the Association ensures the creation of a framework of credibility that enhances the trust of investors and businesses. At the same time, it actively promotes sustainable development and sustainability, consistently supporting the shaping of a modern, transparent, and competitive economic environment that makes Cyprus an attractive investment destination.

With this vision and unwavering commitment to the principles of professional excellence, ICPAC continues to play a decisive role in strengthening the international competitiveness of the Republic of Cyprus and promoting its economic prosperity.

Talent, innovation, and strategic growth

Cyprus is no longer merely a regional player within the European technology landscape; it has emerged as a growing force, boasting one of the highest growth rates in the technology sector over the past decade. This success is attributed to a collective commitment, talent, and determination to adopt a diversified economic model that emphasises innovation.

Many of our young scientists have chosen not to emigrate abroad, as the opportunities they seek are now found here in Cyprus. The country’s dynamic private sector, combined with substantial state support, creates the ideal environment for work and innovation.

However, further development of the research and technology ecosystem requires not only encouraging the repatriation of Cypriot scientists but also actively attracting specialised international scientific and technical talent. The United Arab Emirates serves as a prime example of a successful strategy, blending the attraction of foreign talent with the repatriation of its experts, thereby creating a multicultural and innovative environment.

For Cyprus, implementing a similar approach is critical to establishing a strong technological hub in the wider region, enhancing the country’s competitiveness and economic growth. In this context, it is essential to increase the contribution of research and innovation as a percentage of GDP to 1.5%, leveraging the potential for further investments and strengthening the innovation ecosystem.

Only through this dual strategy, which incorporates both talent repatriation and the attraction of international scientists, will Cyprus succeed in establishing itself as a stable and dynamic pillar of innovation, creating sustainable growth prospects and securing a leading position in the European and global technological arena.

National Sanctions Implementation Unit

The Association expresses its support for the establishment of the National Sanctions Implementation Unit, which is expected to significantly contribute to strengthening the compliance framework and further consolidating the credibility of the Republic of Cyprus. ICPAC actively participates in the public consultation process and constructively contributes to the Parliamentary proceedings, aiming to achieve the best possible outcome regarding the legislative regulation and operation of the new unit.

At the same time, the establishment of the European Anti-Money Laundering Authority (AMLA) represents a major milestone in establishing a unified, robust,

and coherent supervisory framework at the European level. In the context of continuously improving Cyprus’s regulatory framework, ICPAC has submitted specific proposals aimed at enhancing compliance effectiveness and harmonizing with the principles and guidelines set by AMLA.

Tax Reform

At this critical phase of tax reform, the Association wishes to acknowledge the good intentions and clear commitment of the state to implement a modern tax framework. We recognize the importance of the measures being promoted, which aim to simplify the tax system, ensure fairness, and improve efficiency. Nevertheless, we believe there is significant room for improvement to make the tax framework more functional, transparent, and user-friendly for taxpayers and the business community alike. Our proposals primarily seek to strengthen trust between the state and taxpayers, further digitize processes, and develop educational initiatives to enhance tax literacy and a culture of tax responsibility.

Furthermore, we emphasize that tax policy must align with the principles of sustainable development while promoting social justice and cohesion. Only through a fair, transparent, and efficient tax system can economic prosperity and social stability—essential for our country’s future—be ensured.

Migration and Social Integration

Alongside tax reform, it is imperative to focus on critical issues such as migration and social integration, opportunities for quality employment, demographic trends, and the pension system. Although these are longstanding matters, they have not received the necessary attention, despite their potential to cause significant economic and social challenges if left unaddressed. Therefore, targeted policies are required to promote sustainable employment, smooth social inclusion, and demographic stability, ensuring the longterm social cohesion and prosperity of our country.

ESG in the Business Environment

The integration of ESG principles has become an essential prerequisite for the sustainability and competitiveness of businesses. ICPAC takes a leading role in promoting sustainability standards, providing its members with the necessary knowledge and tools for reliable ESG practices documentation. Through transparency and integrity, it seeks to strengthen the trust of investors and society, supporting long-term growth and social cohesion.

Digital Transition

The digital transition and advancements in artificial intelligence are transforming the accounting profession, offering new challenges and opportunities. ICPAC invests in developing digital skills and adopting innovations, ensuring the competitiveness of its members. Through collaborations with public and international bodies, it contributes to fostering healthy entrepreneurship, economic stability, and sustainable

development, thereby enhancing the reputation of the profession and the country on the international stage.

In a rapidly evolving global context, ICPAC remains committed to maintaining professional integrity and promoting innovation, ensuring a sustainable and reliable economic environment for the benefit of professionals and society at large.

Reflection and Gratitude after My Term as Chairman of the ICPAC Board

As my term as Chairman of the Board of the Institute of Certified Public Accountants of Cyprus (ICPAC) draws to a close, I find it essential to offer a brief account of the work accomplished over the past two years, while expressing my sincere gratitude for the honour and trust bestowed upon me to lead this historic and pivotal institution for our country.

This responsibility has been both a privilege and a challenge, especially during a period marked by multiple obstacles but also significant opportunities for the professional services sector.

Throughout this period, ICPAC has substantially strengthened its voice and presence both nationally and internationally. Our strategic priority was the continuous enhancement of the accounting and auditing professions, the reinforcement of transparency and accountability, the adoption of innovation, and our systematic engagement in critical institutional and economic processes.

In pursuit of these goals, we promoted the establishment and institutional consolidation of the CFO Society Cyprus, a modern and innovative platform providing high-level professionals with a forum for dialogue, networking, and policy shaping. Simultaneously, we repositioned the Mediterranean Finance Summit as a key regional forum for financial discourse, attracting prominent international figures and enhancing Cyprus’s profile as a mature and trustworthy hub for professional services.

Moreover, ICPAC actively participated with wellfounded, realistic proposals in the national consultation process on tax reform, collaborating closely with relevant authorities and stakeholders. Our objective was to shape a simpler, fairer, and more competitive tax framework that responds to contemporary economic and social needs.

In the field of education, we advanced the substantial upgrading of educational infrastructure, modernized certification processes, and strengthened examinations and seminars, establishing ICPAC as a benchmark educational and examination body that guarantees professional excellence and ethical integrity among its members.

Emphasis was also placed on promoting sustainability and ESG principles, with ICPAC taking initiatives that position it as a pioneer in the wider region, actively contributing to the transition towards a more responsible and sustainable economy.

Within the framework of enhancing outward orientation, we reinforced ICPAC’s international collaborations. The visit of the President of the International Federation of Accountants (IFAC) to Cyprus represents not only a distinct honour for our Institute but also a clear acknowledgment of the consistent work carried out on the international stage, confirming Cyprus’s role as an important interlocutor in global developments of the accounting profession.

Strengthening Infrastructure and Expressing Gratitude for Collective Commitment

I am also pleased to highlight the acquisition of additional office space within the Institute’s existing premises—an investment that reflects ICPAC’s stability and growth, further enhancing its infrastructure and operational efficiency. All these achievements would not have been possible without the unwavering collective effort that has long characterized ICPAC. I warmly thank the members of the Board of Directors, the Committees, the Executive Management, and all staff whose dedication, professional reliability, and daily contributions have been the cornerstone of our success.

As I step down from this role, I remain confident that ICPAC will continue to advance with seriousness, vision, and ambition, successfully meeting the challenges and expectations of society and its members. Its role is pivotal, its mission ongoing, and its future filled with both challenges and opportunities. I sincerely thank you for your collaboration, trust, and support throughout this term. I remain an active and devoted partner in our shared journey, committed to fostering a strong, ethical, and strategically forward-looking profession.

BUSINESS & ECONOMY

The Gold Standard: Building a Coaching Culture as a Strategic Business Driver

Robert Garcia, MBA, CAE, ACC VICE PRESIDENT, ICF COACHING IN ORGANIZATIONS

In today’s fast-paced, constantly evolving business environment, organizations are under relentless pressure to adapt. Whether due to market disruptions, digital transformation, internal restructuring, or shifting workforce expectations, change is the new normal. And while strategy, systems, and technology are critical, it is people who determine whether transformation succeeds or stalls.

That’s why coaching is no longer just a professional development perk—it’s a strategic necessity. The organizations that thrive are the ones that integrate coaching deeply into their culture, equipping leaders and employees alike with the mindset and behaviors to navigate uncertainty, embrace change, and perform at their best.

Historically, coaching has been limited to a select group, typically senior executives or high potentials. While these engagements often produce powerful outcomes, they don’t go far enough. The real impact happens when coaching becomes part of how the entire organization communicates, collaborates, and leads. The coaching culture makes this possible by helping organizations align key stakeholders and implement scalable solutions that make coaching part of everyday behavior.

But coaching isn’t just about development; it’s also one of the most effective tools for changing management. When leaders are tasked with implementing new systems, restructuring teams, or pivoting strategy, they often face resistance and uncertainty. Coaching provides the mindset and skills to lead through that ambiguity. It helps leaders understand emotional

responses to change, engage in powerful conversations, and foster psychological safety—all critical elements for sustainable transformation.

From a financial perspective, the return on investment (ROI) for coaching is increasingly compelling. For example:

• SAP has provided coaching access to over 100,000 employees and reported USD 2.6 million in cost savings, with 289% ROI from its coaching programs.

• Intel estimates that its coaching efforts contribute approximately USD 1 billion annually to operating margins, demonstrating that coaching has become a critical lever not only for leadership development but also for financial performance and shareholder value.

These are not isolated results. Research by the International Coaching Federation (ICF) and the Human Capital Institute (HCI) found that companies with strong coaching cultures are 60% more likely to have engaged employees and 50% more likely to experience above-average revenue growth. They also show increased agility, innovation, and decision-making capacity—critical traits in times of disruption.

Coaching also plays a key role in building resilience—not only for individual leaders but for entire teams and organizations. In times of change, resilience is what allows people to stay grounded, focused, and proactive. A coaching culture fosters this by encouraging reflection, learning, and a growth mindset. It transforms

COACHING PROVIDES THE MINDSET AND SKILLS TO LEAD THROUGH THAT AMBIGUITY. IT HELPS LEADERS UNDERSTAND EMOTIONAL RESPONSES TO CHANGE, ENGAGE IN POWERFUL CONVERSATIONS, AND FOSTER PSYCHOLOGICAL SAFETY— ALL CRITICAL ELEMENTS FOR SUSTAINABLE TRANSFORMATION.

setbacks into opportunities and fuels a sense of ownership and empowerment that traditional change management approaches often overlook.

These human-centric gains also align with ESG (Environmental, Social, and Governance) goals, particularly in the “S” and “G” dimensions. A coaching culture fosters inclusion, leadership accountability, and ethical decision-making—key criteria for investors and regulators looking for responsible corporate behavior and long-term sustainability. Organizations that embed coaching into leadership development and governance structures are better equipped to deliver on their ESG commitments.

Case in Point: TD Bank and AstraZeneca

TD Bank Group has redefined leadership development through a powerful, organization-wide coaching initiative aimed at empowering its 700+ people leaders. Rooted in the belief that people are the key to

COACHING FOSTERS THE VERY CAPABILITIES NEEDED FOR CHANGE: ADAPTABILITY, CURIOSITY, EMPATHY, COLLABORATION, AND ACCOUNTABILITY. IT HELPS LEADERS MOVE FROM DIRECTING TO EMPOWERING. IT HELPS TEAMS SHIFT FROM SURVIVING TO THRIVING.

business success, TD launched a multi-phased coaching ecosystem designed to build leadership capabilities, enhance employee engagement, and improve customer satisfaction. As a result, the organization achieved record-high customer experience scores, significantly improved employee engagement, and boosted retention, demonstrating the tangible business impact of a well-integrated coaching culture.

What began as an effort to increase coaching time and consistency evolved into a culture-shifting program introducing a standardized coaching model, simplified compliance requirements, and ICFapproved training. Even with the shift to remote work during the COVID-19 pandemic, TD’s investment in coaching proved critical, creating space for meaningful conversations, stronger connections, and a performance-driven culture rooted in care and trust. The result? Record-high customer satisfaction, increased retention, and more inspired leadership across the organization.

AstraZeneca, facing internal feedback that professional development was too backward-facing, reimagined its approach through coaching. The company introduced a future-focused coaching strategy that won the 2023 ICF Coaching Impact Award for Distinguished Organization. This included ICF-certified workshops, career-aligned coaching at all stages, and leadership training that led to USD 4 million cost savings. By

aligning coaching with both individual growth and organizational goals, AstraZeneca not only enhanced capability but also accelerated its transformation journey.

Coaching: Your Engine for Strategic Transformation

As businesses face ongoing transformation—be it through AI integration, hybrid work models, or market realignments- those equipped with a coaching culture will have the upper hand. Coaching fosters the very capabilities needed for change: adaptability, curiosity, empathy, collaboration, and accountability. It helps leaders move from directing to empowering. It helps teams shift from surviving to thriving.

When coaching becomes how your organization operates—not just something it offers—it becomes your competitive advantage. Make coaching your gold standard for growth—and your engine for transformation.

You may ask – but how does an organization begin this journey?

The International Coaching Federation (ICF) understands this deeply and has developed the ICF Coaching Culture Compass—a proven, research-backed roadmap to scale coaching from individual sessions to a fully embedded culture. The ICF Compass guides organizations to use coaching not only as a leadership tool but as a fundamental lever for organizational resilience, engagement, and transformation.

Crucially, the ICF Compass is grounded in over a decade of global research and tailored to fit diverse organizational needs. It’s more than a tool—it’s a strategic framework that links coaching directly to business impact. It helps organizations move from fragmented, one-off efforts to a fully aligned and sustainable coaching ecosystem.

For executives and decision-makers, the message is clear: coaching is a high-impact, high-return investment that aligns talent development with strategic priorities. It supports governance, enhances the employee experience, drives sustainable performance, and

generates measurable ROI. As these examples demonstrate, when implemented effectively, coaching is not only transformative, it’s profitable.

For more information, visit www.coachingfederation.org

About the Author:

Robert Garcia is Vice President & Chief Staff Officer of ICF Coaching in Organizations and is responsible for leading the operations that enable global organizations to build coaching capabilities and develop a strong coaching culture. A pivotal leader in coaching culture development, Robert is renowned for his strategic approach to expanding organizational capabilities.

Previously, he held senior-level positions at Randstad, Society for Human Resource Management, Baptist Health, Florida International University, LHH, ADP, and United Healthcare. Robert has an MBA from FIU and a Bachelor of Science in Management from NSU. He has 5 HR Certifications, including the Senior and Global HR Professional. He has the Associate Certified Coach from ICF and is a Certified Association Executive. He is fluent in English and Spanish and has presented on 6 continents.

Jean Bouquot IFAC PRESIDENT

INTERVIEW

“The Global Accountancy Profession Is a Pillar of Trust in the Economy”

IFAC President Jean Bouquot speaks to Economy Today about the organisation’s mission, the ESG imperative, the attractiveness of the profession, and Cyprus’ position in the global accountancy landscape.

In a time of seismic change for the accountancy profession, shaped by artificial intelligence, the green transition, and growing demands for transparency, Jean Bouquot, President of the International Federation of Accountants (IFAC), highlights the importance of ethics, public trust, and global cooperation.

In this exclusive interview with Economy Today, republished in the Accountancy magazine of ICPAC, Mr Bouquot offers deep insights into the evolving role of professional accountants and the global strategies IFAC is advancing. He stresses the need for unified reporting standards, interoperable ESG frameworks, and a concerted effort to attract new generations into the profession with a compelling purpose-driven narrative.

During his visit to Cyprus, Mr Bouquot also praises the role of ICPAC and the contribution of Cypriot accountants not only to the local economy but to international developments as well. From sustainability reporting to capacity-building in emerging markets, he sees the accountancy profession as a cornerstone of trust, accountability, and long-term value in economies worldwide.

IN THIS EXCLUSIVE INTERVIEW WITH ECONOMY TODAY, REPUBLISHED IN THE ACCOUNTANCY MAGAZINE OF ICPAC, MR BOUQUOT OFFERS DEEP INSIGHTS INTO THE EVOLVING ROLE OF PROFESSIONAL ACCOUNTANTS AND THE GLOBAL STRATEGIES IFAC IS ADVANCING.

For those who may not be familiar, how would you summarize IFAC’s mission and its significance for the global accountancy profession?

We are the global organization of the accountancy profession, representing millions of professional accountants through our 187 member organizations across 142 jurisdictions. Our members—such as ICPAC—are PAOs (professional accountancy organizations). We speak as the global voice of the profession, and we serve as its global convener.

As a membership organization, our primary mission is to deliver value to our members. We conceive of that value in three parts: connection and unity, integrity and global recognition, and a collective voice and commitment to the public interest.

What is IFAC’s strategic ambition as the umbrella organization for the global accountancy profession, and what are the main challenges that emerge?

As the global organization representing the accountancy profession (including practitioners, professional accountants in business, academics, and public sector accountants), IFAC is uniquely positioned to convene the broadest and most diverse community of accountancy leadership. We also have an important voice in dialogues with global stakeholders, such as the International Organization of Securities Commissions (IOSCO), the Basel Committee, the International Organization of Supreme Audit Institutions (INTOSAI), the International Foundation for Ethics and Audit (IFEA), the World Bank, UN Trade and Development (UNCTAD), and the OECD. Our global reach enables us to bring the profession together—across borders, sectors, and specializations—and we know we are “better together,” as we say at IFAC.

Professional accountants serve in a wide range of roles and settings, but we have shared standards that guide our work and a shared International Code of Ethics. We speak the common language of business, delivering comparable and consistent information for investors and stakeholders. This language underpins economies, enables trust, and facilitates our ability to help address

WE ARE THE GLOBAL ORGANIZATION OF THE ACCOUNTANCY PROFESSION, REPRESENTING MILLIONS OF PROFESSIONAL ACCOUNTANTS THROUGH OUR 187 MEMBER ORGANIZATIONS ACROSS 142 JURISDICTIONS. OUR MEMBERS— SUCH AS ICPAC—ARE PAOS (PROFESSIONAL ACCOUNTANCY ORGANIZATIONS). WE SPEAK AS THE GLOBAL VOICE OF THE PROFESSION, AND WE SERVE AS ITS GLOBAL CONVENER.

the complex challenges in business and society today. We bring trust and have a public interest mandate.

How do you view Europe’s differentiation on sustainability issues, and how do you respond to voices claiming that the implementation of ESG criteria reduces competitiveness and increases administrative costs, especially in light of the Draghi Report, which focuses on productivity levels in the European Union?

IFAC is a strong advocate of the opportunity and the public interest responsibility our profession has with the growing demand for trustworthy, highquality sustainability information. We help ensure that investors, lenders, and other stakeholders can make efficient decisions that align with sustainability targets. To be sure, reporting on sustainability-related matters takes work and effort on the part of companies, but the outcome is the delivery of a more complete understanding of companies and their performance— and this is valuable to every stakeholder.

Sustainability is the future of corporate reporting. The evidence in our State of Play research demonstrates this global trend. Europe’s experience with the Green Deal and the Corporate Sustainability Reporting Directive (CSRD) may suggest that the pace of change has been too fast, but the omnibus reforms that have been circulated so far might also be an overreaction. I think focusing on getting the right balance is key. And we strongly encourage full interoperability between all well-intentioned initiatives.

Recent scandals involving major audit firms and revelations by international journalist consortia have harmed the profession’s image. How do you respond to the criticism, and what can be done to restore and strengthen trust in the accountancy profession?

Trust in the quality of financial information is necessary for any society to function. Many factors play a role in developing and maintaining trust, but audit quality is among the most important, so it’s a vital issue for the profession and our stakeholders.

Audit quality depends on the strength of a large and diverse audit ecosystem. The audit process is crucial, but the right people, the right governance, and the right regulation are also essential components of the

ecosystem. And audit quality must be assessed by the right measurements. In the absence of any of these components, the audit may not meet the expectations of stakeholders.

The number of significant audit failures is extremely low as a share of the tens of thousands of audits conducted every year. The level of attention given to the auditor’s potential role in a small number of recent corporate failures may be felt as exaggerating the perception of problems with audit and inviting overreaction. That said, the profession will always attach great importance to evaluating the root causes of audit deficiencies. IFAC and the accountancy profession are committed to continuous improvement in the service of the public interest.

ICPAC has been one of the founding members of IFAC since 1977. What is the importance of this relationship, and what role do you see ICPAC playing or should play in supporting IFAC’s goals?

We have been fortunate to have ICPAC as a member and as a partner in our efforts from the very beginning. In its collaboration across the profession—not only as an IFAC member, but also as a member of Accountancy Europe, the Edinburgh Group, and the Mediterranean Federation of Accountants—ICPAC has shown leadership in the development of highquality international standards. We deeply appreciate the volunteer service of ICPAC members on the IFAC Board, IFAC Advisory Groups, and the international standard-setting boards.

IFAC can only achieve our global goals through the combined efforts of our members. Everything that ICPAC does to advance the accountancy profession in Cyprus—such as the excellent offerings in professional development for sustainability—is a contribution to our goals at IFAC. I encourage our partners at ICPAC to keep sharing their experiences and lead regionally and within Cyprus to drive professional excellence.

How do you assess the Cypriot accountancy profession and its contribution to the local economy, especially given that the services sector remains a strong pillar of Cyprus’s economic model?

The Cypriot accountancy profession is an enormous economic asset for Cyprus, and has been for decades, back to the foundation of ICPAC in 1961. Professional accountants build confidence in the financial and non-financial information on which investors and other stakeholders depend. This is essential to the stability and prosperity of financial markets and organizations. We also have considerable skills and expertise to support and lead companies in the services sector, including financial services companies and many others that have made Cyprus a dynamic hub for investment and economic activity.

Artificial intelligence, sustainability, strengthening of the AML framework, screening of foreign direct investments, and widespread digitalization are shaping a new environment for the accounting and audit profession. How do you see the role of the accountant evolving over the next decade? What skills and responsibilities will dominate?

Many people have observed that our profession has been working differently in recent years, for example, by going remote. But doing the same work differently is not enough for our profession to contribute to long-term, sustainable economic growth against the backdrop of those powerful trends. The profession must also look to do different work entirely, and, individually, we are upskilling, reskilling, and acquiring new competencies.

To seize the opportunities of AI, for example, professional accountants will need to increase their digital literacy and get practical experience with AI systems. PAOs need to support their members to upskill and reskill for AI and a range of other digital competencies—and I encourage everyone to stay engaged with what ICPAC is doing, such as the training held in April on AI risks and compliance under the new EU AI Act.

TO SEIZE THE OPPORTUNITIES OF AI, FOR EXAMPLE, PROFESSIONAL ACCOUNTANTS WILL NEED TO INCREASE THEIR DIGITAL LITERACY AND GET PRACTICAL EXPERIENCE WITH AI SYSTEMS. PAOS NEED TO SUPPORT THEIR MEMBERS TO UPSKILL AND RESKILL FOR AI AND A RANGE OF OTHER DIGITAL COMPETENCIES—AND I ENCOURAGE EVERYONE TO STAY ENGAGED WITH WHAT ICPAC IS DOING, SUCH AS THE TRAINING HELD IN APRIL ON AI RISKS AND COMPLIANCE UNDER THE NEW EU AI ACT.

It is up to every individual to approach new challenges with an inquiring mind, in alignment with our principlesbased International Code of Ethics. Our ethics define our profession and differentiate us from all other service providers. But living up to our principles requires permanent attention, especially at times of great change.

Does the accountancy profession remain attractive to the younger generation, as it was in the recent past?

In some parts of the world, the profession is struggling to attract and retain enough talented individuals to keep pace with the demand for our skills. IFAC has been looking at this issue for a few years because it is a high priority for many of our members. We are still listening to and learning from our members, and I want to offer a few insights.

Our profession should take ownership of our brand. We have let others define us, rather than shape our narrative. We know the exceptional value we bring to society, but we need to tell that story. We also need to do much more to support well-being. My generation comes from a different system, and we have a certain perspective on the balance between private life and work, but we need to respond to the next generations’ priorities.

IFAC’s new Young Leaders Collective, who offer diverse perspectives from around the world to the IFAC Board, is helping us make progress by connecting

their experiences to the issues and initiatives on our agenda. They recently published an article, “Four Key Actions for Young Professionals to Drive Sustainability Reporting,” that emphasizes the link between the work we do as professional accountants and the success of the green transition.

In a global landscape of increasing geopolitical fragmentation and differing economic speeds, how can IFAC contribute to the harmonization of accounting standards and the improvement of transparency, particularly in developing or transitional economies?

Global consensus and harmonization can be hard to achieve even in the best of times. It’s important to acknowledge that the geopolitical environment is difficult. Some jurisdictions are pausing their work toward the harmonization of their standards for sustainability assurance due to concerns about the competitiveness of the domestic industry. In other jurisdictions, we still have not seen the adoption and implementation of high-quality international standards for sustainability disclosure.

Regardless of these trends, sustainability reporting will keep growing in importance. Its central role in sustainable development and climate action is increasingly apparent to all stakeholders. We advocate to our members and our global stakeholders that the International Sustainability Standards Board (ISSB) should be the source of a comprehensive, global baseline for sustainability disclosure. We also support the International Standards on Sustainability Assurance (ISSA) 5000, produced by the International Auditing and Assurance Standards Board (IAASB), becoming the global baseline standard for sustainability assurance, with a level playing field for all professionals and nonprofessionals in this space.

In any case, we strongly encourage alignment and convergence. It would be an enormous missed opportunity if companies—which raise capital globally— are forced to keep multiple sets of books: one to satisfy their local reporting requirements and another to provide information to investors globally.

Charting the future of finance: ICPAC leadership highlights transparency, sustainability, and strategic engagement at the 4th Mediterranean Finance Summit

A New Era for Finance Professionals

The 4th ICPAC Mediterranean Finance Summit brought together distinguished leaders from across the financial ecosystem to explore pressing issues shaping the future of finance. Held under the auspices of the Institute of Certified Public Accountants of Cyprus (ICPAC), the Summit served as a platform for dialogue, strategic foresight, and professional alignment in an increasingly complex and volatile global landscape.

Among the voices that resonated strongly at this year’s Summit were those of three senior ICPAC executives: the former President of the ICPAC Council, Mr. Nicos Chimarides; the General Manager, Mr. Kyriakos Iordanou; and the Head of Technical and Professional Matters, Ms. Eleni Assioti. Each brought a unique perspective to the Summit, grounded in both deep technical knowledge and a forward-thinking vision for the accounting and finance profession. Their interventions underscored ICPAC’s role as a catalyst for excellence, trust, and transformation in the financial sector.

Nikos Chimarides: Advocating for trust, transparency, and technological Readiness

In his address during the opening session of the Summit, Mr. Nicos Chimarides, former President of the ICPAC Council, offered a compelling reflection on the evolving responsibilities of accountants and finance professionals. He emphasized that in today’s economic environment, marked by disruption, digitisation, and climate uncertainty, the role of the profession has become even more pivotal.

“Accountants are not merely reporters of financial performance; they are custodians of transparency, architects of trust, and enablers of informed decisionmaking,” he noted. His remarks reinforced the view that the accounting profession is central to upholding market integrity and enhancing stakeholder confidence.

Mr. Chimarides also stressed the profession’s imperative to embrace technological transformation. From the integration of artificial intelligence and data analytics to the use of digital tools in assurance and reporting, he argued that the readiness of the accounting profession to adapt will determine its continued relevance. He acknowledged the rapid pace of change and positioned ICPAC as a leader in equipping its members with the necessary tools and knowledge to navigate this transformation effectively.

Furthermore, Mr. Chimarides highlighted ICPAC’s ongoing commitment to capacity-building, high ethical standards, and professional development. He concluded his address by reaffirming that ICPAC remains steadfast in its mission to elevate the profession and contribute meaningfully to a resilient and transparent financial system.

Kyriakos Iordanou: Building strategic dialogue through the ICPAC CFO Society

A milestone development presented at this year’s Summit was the launch of the ICPAC CFO Society—an exclusive professional community for Chief Financial Officers, senior financial executives, and strategic leaders in the financial sector. The announcement was delivered by Mr. Kyriakos Iordanou, General Manager of ICPAC, who described the CFO Society as a significant step forward in strengthening the profession’s voice and influence.

In his presentation, Mr. Iordanou explained that the CFO Society was created in response to a growing demand for a specialised forum where senior finance professionals can engage in high-level discourse, share knowledge, and shape policy. By fostering connections between thought leaders and practitioners, the Society aims to create a vibrant ecosystem of strategic collaboration and insight-sharing.

“The CFO is no longer just a guardian of financial compliance; today’s CFO is a strategic partner, an agent

of transformation, and a navigator of uncertainty,” Mr. Iordanou said. He emphasized that the CFO Society will serve as a space where these multifaceted leaders can strengthen their capacity to influence decisions both within their organizations and in broader policy-making circles.

Membership in the CFO Society is open to experienced professionals who are either members of ICPAC or of other recognised professional bodies. Mr. Iordanou highlighted that the Society’s activities will include high-level roundtables, technical forums, policy consultations, and bespoke networking events. He noted that the platform is intentionally designed to be dynamic, inclusive, and responsive to the rapid evolution of the CFO function.

Mr. Iordanou closed his remarks by inviting eligible professionals to become part of this pioneering community and contribute to shaping the financial leadership of tomorrow. He reiterated that initiatives like the CFO Society exemplify ICPAC’s outwardlooking approach and its role in bridging technical excellence with strategic foresight.

Eleni Assioti: Embedding sustainability at the core of financial reporting

A critical theme that permeated this year’s Summit was sustainability, and the role of the accounting profession in driving the transition to a greener, more responsible economy. Ms. Eleni Assioti, ICPAC’s Head of Technical and Professional Matters, offered a thought-provoking presentation that connected sustainability to the core of financial reporting and disclosure practices.

Ms. Assioti began by highlighting the irreversible shift in expectations from investors, regulators, and the public regarding environmental, social, and governance (ESG) performance. “Sustainability is no longer a supplementary narrative to financial statements—it is becoming a vital dimension of corporate accountability and value creation,” she stated.

She discussed the rapid developments in sustainability reporting standards, including the evolving frameworks of the ISSB (International Sustainability Standards Board) and the European Sustainability Reporting Standards (ESRS). She urged finance professionals to remain at the forefront of these developments, noting that robust, verifiable, and decision-useful sustainability information is essential for the credibility of capital markets.

Ms. Assioti positioned the accounting profession as uniquely equipped to lead this transformation. With its strong foundation in assurance, objectivity, and data integrity, the profession can play a decisive role in enhancing the quality of sustainability disclosures. She also shared insights into how ICPAC is proactively supporting its members through training, guidance, and stakeholder engagement on sustainability matters.

Importantly, Ms. Assioti emphasized that sustainability is not merely a compliance issue—it is a matter of strategic positioning. Organizations that integrate sustainability into their core financial and operational strategies are more likely to thrive in an environment of shifting risks and societal expectations. She concluded by affirming ICPAC’s strategic commitment to championing sustainability and ensuring its integration into all dimensions of professional practice.

THE 4TH ICPAC MEDITERRANEAN FINANCE SUMMIT REAFFIRMED THE INDISPENSABLE ROLE OF THE ACCOUNTING AND FINANCE PROFESSION IN GUIDING THE BUSINESS WORLD THROUGH CHANGE

A profession at the heart of transformation

The 4th ICPAC Mediterranean Finance Summit reaffirmed the indispensable role of the accounting and finance profession in guiding the business world through change. Through the contributions of Mr. Chimarides, Mr. Iordanou, and Ms. Assioti, the Summit articulated a vision that places transparency, sustainability, and strategic influence at the center of the profession’s future.

As financial professionals confront challenges ranging from digital disruption to environmental risk, ICPAC continues to provide leadership grounded in professionalism, relevance, and integrity. The Summit not only showcased this leadership, it also marked a step forward in reimagining the role of accountants as architects of a more resilient, inclusive, and forwardlooking economy.

Navigating Economic Challenges: Strategies for Financial Resilience and Growth

Dr. Christodoulos Patsalides outlines the road ahead at the 4th ICPAC Mediterranean Finance Summit

At the 4th Mediterranean Finance Summit organised by ICPAC in Limassol, the Governor of the Central Bank of Cyprus, Dr. Christodoulos Patsalides, delivered a compelling address focused on economic resilience, institutional reform, and financial system adaptability in the face of sustained global uncertainty. His remarks reflected a measured yet forward-looking analysis of both European and Cypriot economic dynamics, set against the backdrop of geopolitical fragmentation, technological acceleration, and intensifying climate pressures.

Dr. Patsalides opened his speech by stressing the strategic necessity of resilience. What was once seen as a policy aspiration, he argued, has now become a structural imperative. The confluence of geopolitical shocks, inflationary cycles, trade realignments, and energy volatility has underscored the urgent need for a financial ecosystem that is not merely reactive but anticipates risks, adapts rapidly, and supports inclusive growth. Resilience, he said, must now be embedded across the financial sector—not only in its institutions, but in its regulatory DNA and market infrastructure.

Turning to the broader European context, Dr. Patsalides noted that the European Central Bank, following a period of aggressive monetary tightening, initiated a 25 basis point rate cut in April 2025. This was in response to steady disinflation and a stabilisation in mediumterm inflation expectations. Yet, he warned that inflation remains uneven, particularly in services and core categories, warranting a data-driven, meeting-bymeeting approach from the ECB moving forward.

He underscored that monetary policy alone cannot deliver resilience. For the European Union to safeguard competitiveness and strategic autonomy, deeper

Dr. Christodoulos Patsalides

TURNING TO THE BROADER EUROPEAN CONTEXT, DR. PATSALIDES NOTED THAT THE EUROPEAN CENTRAL BANK, FOLLOWING A PERIOD OF AGGRESSIVE MONETARY TIGHTENING, INITIATED A 25 BASIS POINT RATE CUT IN APRIL 2025. THIS WAS IN RESPONSE TO STEADY DISINFLATION AND A STABILISATION IN MEDIUM-TERM INFLATION EXPECTATIONS.

integration of its financial architecture is essential. This includes dismantling internal market fragmentation, particularly in services and the digital economy, and unlocking the latent power of private savings, estimated at €33 trillion across the EU, through a fully realised Capital Markets Union. He also called for expanding venture capital availability and closing the persistent equity funding gap, especially for high-tech sectors and innovative SMEs.

Dr. Patsalides also argued that the European Securities and Markets Authority (ESMA) must be granted broader supervisory competencies to harmonise regulatory enforcement across member states. Completing the Banking Union remains a priority, particularly through the establishment of a common European deposit guarantee scheme that would break the feedback loop between banks and sovereign debt. Moreover, he advocated for the introduction of a European “safe asset”—such as a Eurobond—that could provide a benchmark for capital markets, reinforce monetary policy transmission, and offer institutional investors a credible low-risk instrument.

The Governor further highlighted the importance of operational resilience. He pointed to the Digital Operational Resilience Act (DORA) as a critical tool for safeguarding financial entities against cyber threats and ICT disruptions. At the same time, he stressed the role of sustainability regulation—including the Corporate Sustainability Reporting Directive (CSRD) and the Sustainable Finance Disclosure Regulation (SFDR)—in embedding ESG criteria and climate risk within financial decision-making processes.

Focusing on Cyprus, Dr. Patsalides presented a confident but measured assessment. The country’s economy, he noted, remains one of the strongest performers in the euro area, with robust growth driven by domestic demand, tourism, ICT, professional

services, and shipping. The fiscal picture is equally encouraging, with a declining debt-to-GDP ratio, a sustained budget surplus, and Cyprus now firmly within the A-rated sovereign category.

He spoke at length about the improved resilience of the Cypriot banking sector, highlighting stronger capital buffers, improved profitability, declining nonperforming loans, and ample liquidity. Banks are not only financially healthier but have also strengthened their governance frameworks, risk culture, and digital capabilities. In parallel, the Central Bank has bolstered its regulatory architecture through a series of targeted actions. These include the creation of a dedicated supervisory directorate for electronic money and payment institutions, the issuance of updated AML and CTF directives in May 2025, and the recalibration of the counter-cyclical capital buffer in response to credit growth trends.

Cyprus, he added, is also aligning itself with the European green finance agenda. The establishment of a dedicated Sustainability Committee and a Climate Change Office within the Central Bank reflects the island’s determination to embed climate risk assessment into supervisory practices and internal operations. The aim, he said, is not only to comply with European standards but to proactively shape the regulatory environment in ways that support long-term economic transformation.

Dr. Patsalides concluded his remarks by calling for leadership at all levels of the financial sector. CFOs, regulators, and policymakers must cultivate strategic foresight, ethical governance, and institutional agility. Small states like Cyprus, he noted, have the advantage of flexibility. If they innovate decisively, they can act as early movers and inspire reform on a European scale. For that to happen, however, successful national models must be scaled across borders, and internal EU barriers must be dismantled.

“Resilience is not a static condition,” Dr. Patsalides emphasised. “It is a dynamic process of renewal, collaboration, and structural adaptation. And it is through this lens that we must approach both the risks and the opportunities of the decade ahead.”

In his view, Cyprus is uniquely positioned to play a pivotal role in shaping a future-ready Mediterranean finance landscape—one that is secure, sustainable, and strategically aligned with European objectives.

Insights from an Olympic Champion at the 4th ICPAC Mediterranean Finance Summit

At the crossroads of elite sport and executive leadership, Pavlos Kontides stands as a vivid exemplar of how disciplined strategy, resilience, and intentional decision-making underpin sustained excellence. From his early days navigating the unpredictable seas off Limassol to ascending the Olympic podium twice—making history as Cyprus’s only double Olympic medallist—Kontides’s journey transcends the boundaries of athletics. His narrative is a masterclass in strategic foresight and operational discipline, offering profound lessons for CFOs, auditors, and governance professionals facing the complexities of modern business environments.

In May 2025, at the prestigious 4th ICPAC Mediterranean Finance Summit held in Limassol, Kontides addressed a gathering of finance leaders, auditors, and corporate governance experts. Rather than presenting traditional financial analyses or economic forecasts, he shared a compelling lived experience of leadership under pressure—a story that resonated deeply with professionals tasked daily with making high-stakes decisions amid volatility and uncertainty. His message was clear, concise, and powerful: excellence is the product of deliberate choices, especially when those choices are most difficult.

This article delves into the dimensions of Kontides’s career and philosophy, unpacking how his disciplined mindset and strategic clarity provide invaluable insights for the world of finance and governance. It reveals how the same principles that drive his sailing success— strategic patience, data-informed decision-making, resilience, and values-driven leadership—are equally essential in today’s fast-evolving business landscape.

THIS ARTICLE DELVES INTO THE DIMENSIONS OF KONTIDES’S CAREER AND PHILOSOPHY, UNPACKING HOW HIS DISCIPLINED MINDSET AND STRATEGIC CLARITY PROVIDE INVALUABLE INSIGHTS FOR THE WORLD OF FINANCE AND GOVERNANCE.

Early Foundations: The Making of a Strategic Athlete

Born in 1990 in the coastal city of Limassol, Pavlos Kontides began his sailing journey at the tender age of nine. His rapid progression into the Laser class by fourteen was no coincidence but a conscious, strategic choice rooted in a keen understanding of competitive dynamics. The Laser class, a physically demanding,

single-handed dinghy discipline, demands not only superior athleticism but razor-sharp tactical acumen and psychological resilience.

Unlike team-based or equipment-dependent sailing classes, success in the Laser relies almost exclusively on the individual sailor’s ability to adapt to changing wind and water conditions, maintain peak physical condition, and make split-second tactical decisions. Kontides’s early embrace of this challenging discipline reflects his instinct for embracing complexity and uncertainty—traits that would become central to his leadership ethos.

His Olympic debut at the Beijing 2008 Games, where he narrowly missed qualifying for the medal race, served not as a setback but as a strategic

inflection point. Rather than becoming complacent or discouraged, Kontides identified this experience as an opportunity for recalibration. He intensified his training regimen, refined his tactical approach, and embraced an unwavering commitment to continuous improvement— hallmarks of a strategic mindset oriented toward longterm excellence.

For finance leaders, this early stage of Kontides’s career exemplifies the critical importance of early investment in capability building and iterative learning. Much like an emerging CFO who must navigate early challenges to establish credibility and mastery, Kontides’s story underscores that initial failures often seed future success when met with reflective discipline and focused strategy.

London 2012: Breaking barriers and redefining possibility

The London 2012 Olympic Games marked a seminal moment—not only for Kontides but for Cyprus itself. After years of relentless preparation—characterized by meticulous physical conditioning, strategic planning, and psychological fortitude—Kontides secured a historic silver medal in the Laser class, the first Olympic podium finish for a Cypriot athlete.

This achievement was the culmination of a multifaceted approach to performance excellence. Kontides’s strategy involved more than just physical training; it extended to managing his environment and mental focus. To shield himself from distractions, he consciously limited media exposure during competition, preserving his psychological edge. He sought training opportunities in challenging environments abroad,

HIS TRAINING PHILOSOPHY SHIFTED FROM SHEER VOLUME TO VALUE OPTIMIZATION. BY HARNESSING BIOMETRIC FEEDBACK, NUTRITIONAL PERIODIZATION, RECOVERY SCIENCE, AND DATA ANALYTICS, KONTIDES FINE-TUNED EVERY ASPECT OF HIS PERFORMANCE.

cultivating adaptability through adversity. Moreover, he embraced cutting-edge performance analytics and simulation technologies, a progressive approach that contrasted with the prevailing intuition-driven methods in Olympic sailing at the time.

Financial constraints were a persistent reality, as Olympic sailing lacks the commercial visibility and sponsorships typical of higher-profile sports. Annual expenditures often exceeded €100,000, covering international travel, coaching, equipment, and recovery. Kontides navigated this landscape through a combination of personal investment, national funding, and unwavering determination, embodying a disciplined approach to resource management that resonates strongly with CFOs managing constrained budgets and risk exposure.

His message at the ICPAC Summit emphasized this overlap between elite sport and corporate finance: strategic excellence demands deliberate investment, rigorous risk management, and steadfast commitment, even when outcomes remain uncertain. For governance professionals, this also highlights the importance of clear prioritization and transparency in resource allocation, ensuring that strategic goals align tightly with available capital and risk appetite.

The pursuit of margins: Continuous improvement and intellectual growth

Following his Olympic breakthrough, Kontides’s journey was marked by an evolution from raw talent to methodical mastery. Recognizing that peak athletic performance is as much scientific as physical,

he pursued academic studies in Ship Science at the University of Southampton. This interdisciplinary field provided him with a deeper understanding of naval engineering, hydrodynamics, and data modelling—tools that he integrated seamlessly into his competitive strategy.

His training philosophy shifted from sheer volume to value optimization. By harnessing biometric feedback, nutritional periodization, recovery science, and data analytics, Kontides fine-tuned every aspect of his performance. This holistic, evidence-based approach culminated in back-to-back Laser World Championships in 2017 and 2018, affirming his status not just as an Olympic medallist but a thought leader in sustainable elite performance.

His ability to consistently rank among the top sailors globally reflects mastery of strategic consistency and adaptive resilience—qualities that today’s finance leaders must embody to navigate market volatility, regulatory complexity, and technological disruption.

Finance executives, auditors, and risk managers can draw a parallel here: continuous improvement demands integration of data-driven insights with experience-

based judgment. Kontides’s intellectual investment in the science behind his sport mirrors the imperative for finance professionals to combine technical expertise with strategic foresight, embracing emerging technologies such as AI, machine learning, and advanced analytics to optimize decision-making while remaining anchored in fundamental principles.

Lessons from setbacks: Reframing failure as strategic intelligence

Kontides’s career was not without setbacks. A seventhplace finish at Rio 2016 and narrowly missing a podium at Tokyo 2020 presented significant challenges. Yet his response to these disappointments encapsulates the mindset required for enduring success in any field.

At the 4th ICPAC Mediterranean Finance Summit, he shared this perspective candidly: “I had to learn how to reframe disappointment as data. That’s what separates those who endure from those who exit.” For finance professionals, this reframing is crucial. Downturns, failed projects, and audit findings are not endpoints but valuable data points for strategic refinement.

In the context of corporate governance, this translates into cultivating a culture where mistakes are openly analyzed, lessons extracted, and risk mitigation continuously enhanced. Kontides’s approach models the disciplined resilience necessary to thrive amid uncertainty—diagnosing failures dispassionately, adapting strategy accordingly, and maintaining focus on long-term goals.

Moreover, this approach has implications for leadership development: promoting psychological safety within teams encourages transparency, innovation, and agility—attributes critical in volatile and complex financial environments.

Paris 2024: Strategic patience and emotional discipline on the world stage

At the 2024 Paris Olympics, Kontides reaffirmed his elite status with a second Olympic silver medal in the fiercely competitive Laser class. His performance was distinguished not just by technical prowess but by an exemplary demonstration of emotional discipline and strategic patience.

In the final, as weather conditions grew erratic and competitors resorted to high-risk maneuvers, Kontides adhered to a conservative, risk-adjusted strategy prioritizing positional security over opportunistic aggression. This approach underscored a leadership lesson increasingly relevant in today’s turbulent markets: sustainable success stems from disciplined execution, scenario planning, and timely restraint rather than reckless gambles.

For finance leaders grappling with geopolitical risks, inflationary pressures, and digital transformation, Kontides’s strategy offers a compelling blueprint for balancing risk and reward through measured, valuesaligned decision-making.

His journey also exemplifies the importance of emotional intelligence and self-regulation in highstakes environments—a skillset increasingly recognized as essential in boardrooms and executive suites for managing crises, negotiations, and stakeholder relationships effectively.

HIS STORY AFFIRMS THAT HIGH PERFORMANCE IS A SUSTAINABLE JOURNEY, ACHIEVED THROUGH CUMULATIVE GAINS MADE ONE DISCIPLINED DECISION AT A TIME—A MESSAGE OF EMPOWERMENT AND RESILIENCE THAT RESONATES FAR BEYOND THE WORLD OF SPORT.

Strategic discipline in finance and governance: Lessons for today’s leaders

What makes Pavlos Kontides’s story especially pertinent to finance and governance professionals is his relentless emphasis on intentionality—a principle that anchors effective leadership in any domain.

As the finance profession evolves—from compliancefocused roles toward strategic business advisory functions—leaders must navigate unprecedented challenges, including AI adoption, regulatory shifts, ESG integration, and heightened stakeholder expectations. Kontides’s journey exemplifies how technical skill alone is insufficient without a strategic vision grounded in clear values and discipline.

His experience managing limited resources, assessing opportunity costs, and prioritizing long-term gains over short-term wins parallels the decisions CFOs face daily. Moreover, his embrace of continuous learning and interdisciplinary knowledge acquisition mirrors the upskilling imperative within finance, where data literacy, ethical stewardship, and stakeholder communication are becoming core competencies.

Kontides also exemplifies resilience under pressure, a quality indispensable for leaders managing change fatigue, burnout, and crisis response. His ICPAC insight“In moments of exhaustion, you don’t rise to the occasion-you fall back on your training”-serves as a powerful reminder that excellence results from habitual discipline and preparation, not spontaneous effort.

Legacy and inspiration: Cultivating a culture of deliberate excellence

Beyond his sporting accolades, Pavlos Kontides’s enduring legacy lies in his embodiment of deliberate excellence. His career serves as a beacon for emerging leaders, athletes, and professionals, demonstrating that success arises from clarity of purpose, strategic foresight, and steadfast governance.

In an era marked by complexity, rapid change, and pervasive uncertainty, Kontides’s narrative offers a timeless blueprint: anticipate risks vigilantly, adapt with agility, and anchor decisions in enduring values. Whether navigating the unpredictable sea or the strategic challenges of the corporate world, these principles remain constant.

His story affirms that high performance is a sustainable journey, achieved through cumulative gains made one disciplined decision at a time—a message of empowerment and resilience that resonates far beyond the world of sport.

Conclusion: Sailing toward a future of strategic leadership

Pavlos Kontides’s career is more than a chronicle of sporting success; it is a rich source of strategic wisdom for the finance and governance community. His disciplined approach to training, adaptive mindset, and value-based decision-making offer a compelling leadership framework fit for the challenges of the 21st century.

As organizations strive to balance innovation with risk, growth with sustainability, and agility with stability, Kontides’s example provides a beacon of how to navigate complexity with clarity and confidence. His story encourages leaders to embrace resilience, invest in continuous learning, and lead with intentionality— principles that will remain vital in the evolving landscape of global finance.

At the 4th ICPAC Mediterranean Finance Summit, his keynote was a reminder that leadership excellence, like elite sport, demands more than talent alone. It requires a commitment to strategic discipline, a willingness to learn from every outcome, and the courage to make deliberate choices even when the stakes are highest.

CSRD Implementation Journey: Challenges and Rewards

Anna Pieridou ACA ESG UNIT, HELLENIC BANK, MEMBER OF THE EUROBANK GROUP MEMBER OF ICPAC’S ESG & SUSTAINABILITY COMMITTEE

Member of ICPAC’s ESG & Sustainability Committee

As trained accountants, we thrive on structure and standards. So, when it was time to embark on the Corporate Sustainability Reporting Directive (CSRD) implementation journey, this was met with curiosity—and dare I say, excitement. For those of us in the ESG team, reporting on environmental, social, and governance (ESG) matters has been business as usual in the past years. However, this time around, it was something new and transformative for everyone involved.

The Advantages of CSRD Implementation

One notable highlight of CSRD implementation is the use of the Double Materiality Assessment (DMA), which is the first step undertaken in the process. The DMA process enables organizations to assess and identify material impacts, risks, and opportunities through a comprehensive exercise involving both internal and external stakeholders. In essence, the results of this structured analysis pinpoint where the organization must focus its efforts.

The DMA was further enriched by workshops and guidance provided to stakeholders, enhancing their understanding of sustainability in a way that had never been achieved before. This extensive process required significant resource allocation and served as an opportunity to secure buy-in from various stakeholders, which proved crucial.

As accountants, we naturally gravitate toward measurable impacts, and the CSRD journey reaffirmed the importance of understanding your current position

AS ACCOUNTANTS, WE NATURALLY GRAVITATE TOWARD MEASURABLE IMPACTS, AND THE CSRD JOURNEY REAFFIRMED THE IMPORTANCE OF UNDERSTANDING YOUR CURRENT POSITION AND WHERE YOU WANT TO BE, AS WELL AS THE SUSTAINABILITY RISKS AND OPPORTUNITIES OF THE ORGANISATION.

and where you want to be, as well as the sustainability risks and opportunities of the organisation. Solid KPIs, KRIs, and structured reporting allow organisations to gain a more in-depth view, providing a new perspective and setting quantifiable targets. Coupled with monitoring and reporting, this method becomes the cornerstone of achieving the required sustainability goals. By the end of the CSRD implementation, it is clearer which policies and procedures should be in place.

The Challenges Along the Way

Like any transformative exercise, CSRD implementation came with its share of challenges. Internal and value chain data limitations impacted the depth and breadth of reporting. The numerous datapoints required within ESRSs often made it difficult to see the value added, given the data availability limitations and the fact that in various areas, organisations are still at the very initial stages. As sustainability reporting matures over time, this will also allow for the benefits of this exercise to be flashed out and cascaded within the organisations in the coming years.

Concerning obtaining assurance, as with everything being implemented for the first time, several areas were thoroughly iterated upon to provide the required comfort to the auditors.

These considerations, such as the complexity and scope of data required, are reflected in the Omnibus legislative package proposals published in February 2025. In April 2025, the European Council approved the postponement (“stop-the-clock”) portion of the

proposal, which postpones reporting under the CSRD for Wave 2 and 3 companies by 2 years. The next phase is the simplification of the ESRS’s datapoints, provision of additional clarifications and instructions, as well as improving consistency and interoperability. This is expected to be completed towards the end of 2025.

Conclusion: Beyond Reporting

If there’s one key takeaway from this journey, it’s that success in sustainability requires both structure and transparency. Through CSRD implementation, organizations gain clarity on where to focus and establish the necessary processes that not only facilitate reporting but also drive real progress toward sustainability goals.

It’s important to recognize that the value goes far beyond reporting. Was the process challenging? Absolutely. Was it worth it? Undeniably. Is there still work to be done? Yes—but with greater focus, structure, and informed stakeholders, the path forward is promising.

And for those who believe that ESG’s momentum is weakening, I firmly disagree. This is not about chasing a trend—it’s about fulfilling the responsibility of managing a business sustainably, which is everyone’s responsibility.

Unaffordable Housing for Our Youth: A Sign of State Failure

Charalambos Petrides FORMER DEFENCE MINISTER, FORMER MAYOR OF AGLANTZIA, REAL ESTATE CONSULTANT

It is no exaggeration to say that, for the first time in the modern history of the Republic of Cyprus, the dream of a young couple to own a decent home feels more distant than ever.

For previous generations, the average family income was sufficient to buy a home. Today, both purchase and rental prices have increased disproportionately compared to wages. The same applies to loan interest rates, which have risen significantly, in contrast to deposit interest rates that are close to zero.

As a result, taking out a loan as well as the whole procedure has become an overwhelming burden, particularly for low- and middle-income families, students, single-parent households, workers, retirees, and young couples trying to start their lives. But it is not just loans—it’s the overall cost of living. Prices continue to rise for electricity, fuel, everyday products, and now, alarmingly, even water.

There are many reasons behind this crisis, some of which are linked to our economic development model and the large influx of foreign workers and businesses. We are not against investments—our country needs them. However, we need even more housing for our residents who wish to stay, build their careers, and start families, realizing their dreams in their homeland.

This issue has severe social and economic consequences, affecting demographic growth, quality of life, and the nation’s economic stability. Young couples postpone starting a family due to financial uncertainty, staying longer with their parents, which hinders their economic and psychological independence. At the same time, an aging population exacerbates long-term economic sustainability concerns. Many young professionals emigrate in search of better living conditions, leading to brain drain—the loss of skilled human capital.

I HAVE REPEATEDLY EMPHASIZED THE NEED FOR A COORDINATED POLICY THAT INCLUDES TAX INCENTIVES, TARGETED SUBSIDIES, AND GOVERNMENT INTERVENTION. STATE SUPPORT FOR AFFORDABLE HOUSING ACCESS IS NOT JUST SOCIALLY JUST—IT IS ESSENTIAL.

As a real estate appraiser with nearly two decades of experience in land management and valuation, I am deeply familiar with the state of the housing market. I have repeatedly emphasized the need for a coordinated policy that includes tax incentives, targeted subsidies, and government intervention. State support for affordable housing access is not just socially just—it is essential.

We also face external influences (war, inflation, migration, etc) that affect the housing issue, and any policy to be effective needs to incorporate such influences. The government has several tools at its disposal that must be leveraged. European Recovery and Resilience funds, social housing programs, student accommodations, and low-interest loans are all viable solutions. Thousands of properties remain off the market because their owners lack any incentive to sell or rent them, keeping prices high. Even municipalities have a role to play in developing social and student housing. There is so much that can be done, yet we continue to delay, tightening the financial noose around our citizens.

We must strengthen affordable housing programs through initiatives that include low-interest loans for

home purchases or rentals. Infrastructure and funding must be tailored to meet the housing needs of citizens, particularly young couples. Subsidy programs, tax exemptions, and support for first-time homebuyers are crucial measures.

Public land can be used for the construction of residential units offered under favorable conditions. Adjustments should be made to increase housing supply and building coefficients in specific areas. Additionally, households should receive assistance to reduce heating and cooling expenses. Energy efficiency programs can help residents afford to stay in their homes. Several EU initiatives offer funding for renewable energy and energy efficiency projects, which could be utilized to lower housing costs.

It is vital to explore all available opportunities to strengthen affordable housing and expand funding, with a focus on young couples. Developers should be given incentives to construct thousands of new homes across all districts in the coming years.

We also know that €5.3 million has been collected from the sale of building certificates for affordable housing. These funds must be utilized as soon as possible.

Establishing a central agency to manage housing initiatives and subsidies with a fast-track approval process could ensure that decisions are made efficiently and effectively.

Our society’s and government’s failure to provide solutions for young couples is a clear sign of dysfunction. The situation must be reversed as quickly as possible.

Only through coordinated action and targeted investments can we offer real solutions to the housing crisis and support young families in building a stable future.

BUSINESS & ECONOMY

Investing in Social Cohesion and the Strategic Potential of the “Indian Touch”

Polys Kourousides PRESIDENT OF THE ASSOCIATION OF PROPERTY VALUERS OF CYPRUS

There is no greater challenge facing Cyprus today than reshaping its productive model, one that goes beyond conventional GDP metrics and incorporates the vital objective of social cohesion. The attraction of investment must not be an end, but a means to a greater purpose: empowering sectors that drive inclusive development, such as youth employment, technological innovation, and sustainable infrastructure that enhances citizens’ quality of life.

The Modi Visit: A Strategic Message

Seen through this lens, the recent visit of Indian Prime Minister Narendra Modi to Cyprus was not a ceremonial stop, but a strategic gesture. India views Cyprus as a reliable partner and as a potential gateway to the European Union. This perception opens a window of opportunity for Cyprus to position itself within the newly energised India–Middle East–Europe Economic Corridor (IMEC).

Cyprus’ profile as a stable EU country with the rule of law and institutional maturity offers the ideal platform to support India’s outward economic ambitions, particularly in digital infrastructure, shipping, and research collaboration. In doing so, Cyprus can extend its regional relevance from the Eastern Mediterranean into broader connectivity frameworks.

Reliability is Our Competitive Advantage

In today’s volatile international environment, trust matters. Cyprus’ key comparative advantages lie in its legal certainty, EU market access, strategic location, and

CYPRUS’ PROFILE AS A STABLE EU COUNTRY WITH THE RULE OF LAW AND INSTITUTIONAL MATURITY OFFERS THE IDEAL PLATFORM TO SUPPORT INDIA’S OUTWARD ECONOMIC AMBITIONS, PARTICULARLY IN DIGITAL INFRASTRUCTURE, SHIPPING, AND RESEARCH COLLABORATION.

resilient institutions. These qualities define our national “brand,” and they must be projected confidently and consistently to strategic investors looking for predictability and stability.

Cyprus must continue to position itself not merely as a destination for capital but as a partner in transformation. Indian investment interest must be linked to high-impact initiatives that strengthen the country’s productive base and benefit its human capital.

From Opportunistic Capital to Lasting Partnerships

What Cyprus needs is not quick wins or speculative projects. It needs strategic partnerships with long-term horizons — investments that come with commitments to local employment, skills transfer, and the cocreation of innovation ecosystems. The development of technology parks, enhanced cooperation in cybersecurity and maritime sectors, and deeper ties between Cypriot and Indian universities are not distant visions. They are realistic goals that require coordinated planning, bold leadership, and an enabling regulatory environment.

Retaining Talent, Building the Future

Investment must have a social compass. We must give our young people the confidence to envision their future here, in Cyprus, to see meaningful job opportunities that correspond with their education and aspirations. This is the real test of economic policy: keeping talent at home by creating an environment where people feel that growth includes them, not excludes them.

A Moment That Demands Action

The geopolitical moment is ripe. India is not just rising; it is reaching outward, and Cyprus can be a trusted entry point. But this opportunity will only materialise if Cyprus demonstrates consistency, vision, and seriousness in its long-term strategy. Strategic positioning means nothing without follow-through.

Patriotism Through Strategic Extroversion

Ultimately, this is the new patriotism: turning foreign partnerships into engines of domestic progress, using extroversion as a tool for national strength, and embedding economic diplomacy within a humancentered model of growth.

The “Indian touch” is not a passing media narrative. It can become a strategic cornerstone in Cyprus’ next economic chapter, one defined by stability, innovation, and social cohesion.

Deconstructing Pillar Two – Impact on Multinational Enterprise

TAXAND CYPRUS | PARTNER | INTERNATIONAL TAX – TRANSFER PRICING

In 2013, the Organization for Economic Cooperation and Development (OECD) and the G-20 joined forces in an effort to prevent multinational enterprises (MNEs) from using aggressive tax planning techniques to avoid paying their fair share of tax. In this context, the OECD, after two years of work, published 15 actions to eliminate the base erosion and profit shifting (BEPS) activities of such MNEs. These 15 actions aim to ensure that profits are taxed where economic activities take place and value is created.

In brief, the OECD/BEPS project comprises three key pillars: first, introducing coherence in the domestic tax rules that affect cross-border transactions; second, strengthening substance requirements in the context of tax treaties; and third, improving transparency and certainty.

Although the OECD/BEPS project has changed the international tax landscape, some issues remain unresolved. To this end, in January 2019, the OECD/G-20 Inclusive Framework (IF) countries agreed on a two-pillar approach: Pillar One on the digital economy (i.e., BEPS action 1); and Pillar Two to address the remaining BEPS issues (i.e., BEPS actions 2–15).

Finally, following the agreement in October 2021 of 137 (out of 141) IF members, the OECD announced in December 2021 the Pillar Two Model Rules that were based on the Pillar Two Blueprint published in October 2020.

Christos Theophilou of Taxand Cyprus analyzes and explains the Pillar Two Model Rules, their likely impact on in-scope multinationals, and the steps that businesses should take to prepare for the proposed implementation of the Rules in 2023.

The aim of Pillar Two is first to reduce the incentives for MNEs to shift group profits to low-tax countries, and second to ensure that large internationally operating businesses pay a minimum level of tax of 15% regardless of where they are headquartered or operate.

Christos A. Theophilou

IN BRIEF, THE OECD/BEPS PROJECT COMPRISES THREE KEY PILLARS: FIRST, INTRODUCING COHERENCE IN THE DOMESTIC TAX RULES THAT AFFECT CROSS-BORDER TRANSACTIONS; SECOND, STRENGTHENING SUBSTANCE REQUIREMENTS IN THE CONTEXT OF TAX TREATIES; AND THIRD, IMPROVING TRANSPARENCY AND CERTAINTY.

Not surprisingly, a few days after the Pillar Two Blueprint was published, the European Commission proposed a draft directive to implement the OECD/ IF Pillar Two Model Rules coherently and consistently across EU member states.

Inevitably, a global minimum tax rate of 15% will affect the MNEs in scope because the IF and EU members represent more than 95% of global GDP.

Pillar Two: Building Blocks

Pillar Two stems from the German–French initiative to introduce a global minimum tax on low-taxed foreign profits, and it is largely based on the U.S. Global Intangible Low-Taxed Income (GILTI) and Base Erosion Anti-Abuse Tax (BEAT) rules. Pillar Two rules comprise four building blocks: two of them apply in the residence state, that is, the Income Inclusion Rule (IIR) and the Switch-Over Rule (SOR), and the remaining two are source state rules, that is, the Undertaxed Payments Rule (UTPR) and Subject to Tax Rule (STTR).

Notably, the IIR and UTPR (together called the Global Anti-Base Erosion Rules or the GloBE Rules) are implemented in a country’s domestic tax law, while, on the other hand, the STTR and SOR are tax treaty rules. Furthermore, Pillar Two provides an ordering rule: The STTR applies first, then the IIR and SOR follow, and, finally, the UTPR applies. Importantly, only one of these rules can apply at a time.

In a nutshell, Pillar Two consists of two interlocking domestic rules, the IIR and UTPR, and two treaty-based rules, the STTR and SOR.

Global Anti-Base Erosion and Switch-Over Rules

Under the GloBE Rules, the IIR operates first as a “super” controlled foreign company (CFC)-like rule, but with a broader scope. In a nutshell, the IIR imposes a top-up tax on a parent entity with respect to the low-taxed income of a constituent entity. In the case of several tiers of parent companies, the IIR follows a topdown approach rather than a bottom-up approach. That is, in identifying which entities the IIR would apply to, the MNE should begin with the ultimate parent entity, if any, and then any potential intermediary parent entities moving down in the MNE chain structure.

If a tax treaty prevents the residence jurisdiction from applying the IIR (i.e., article 23A of the OECD Model Tax Convention provides exemption from tax), then the SOR would make such relevant tax treaty provision inapplicable (i.e., switching from an exemption method to a credit method). Thus, the SOR eliminates tax treaty obstacles for the IIR to apply accordingly. Finally, the UTPR serves as a backstop to the IIR in case the lowtax income of such constituent entity is not subject to tax under the IIR. This will be the case where the parent entity jurisdiction is either a low-tax jurisdiction or did not implement the GloBE Rules.

Subject to Tax Rule

The STTR is a defensive measure typically used by source states—normally high-tax jurisdictions— regarding intra-group outgoing payments that are insufficiently taxed in the hands of a related recipient resident in a low-tax jurisdiction. According to the Pillar Two Blueprint, the STTR will operate as a standalone tax treaty rule restricted to certain categories of intragroup passive income payments, known as “covered payments,” for example, interest, royalties, that are taxed less than 9%.

The STTR is limited to developing countries, defined as those with a gross national income per capita (calculated using the World Bank Atlas method) of $12,535 or less in 2019 (to be regularly updated). As a result, source-developing countries will be able to protect themselves from base-eroding passive payments to low-tax jurisdictions.

MNEs should carefully consider the monetary impact of the STTR in their group structures, and could follow this three-step approach:

• Identify the affiliates in scope, i.e., affiliates located in a developing country.

• Determine whether there are any payments in scope, i.e., intra-group payments that are considered as covered payments; and

• Ascertain whether such covered payments are below the minimum withholding tax rate for the STTR, which is 9%.

GloBE Rules: The Five-Step Approach

In applying the GloBE Rules (which run to about 45 pages with another 15 pages of definitions and accommodate a diverse range of tax systems), the OECD proposes a five-step approach.

Step 1:

Identify the MNE Group and Its Constituent Entities Within

Scope

Under step 1, an MNE should first determine whether it falls within the scope of the GloBE Rules and then identify the location of each constituent entity within the MNE group. According to article 1.1, an MNE will be in scope if its consolidated annual revenue exceeds the country-by-country reporting threshold, that is, 750

million euros ($822.5 million) in at least two of the four fiscal years immediately preceding the tested fiscal year. If an MNE is in scope, it should identify all constituent entities for which the GloBE Rules apply.

According to article 1.3, the term “constituent entity” comprises all group entities, including permanent establishments. The location of such entities (see article 10.3) will be where the group entities are considered to be tax residents, and in the case of a permanent establishment, where it is located. If a constituent entity is considered to be a dual resident, then the tie-breaker rule of article 4(3) of the OECD Model Tax Convention would normally apply.

Finally, under article 1.5, the GloBE Rules provide a list of excluded entities: governmental entities; international organizations; non-profit organizations, pension funds; and any investment fund or real estate investment vehicle that is the parent entity of an MNE.

Step 2:

Determination of GloBE Income or Loss of a Constituent Entity

After identifying the MNE group and its constituent entity within scope, the next step is to calculate the GloBE Income or Loss of a constituent entity. The GloBE Income or Loss computation is necessary as it is the denominator in the effective tax rate (ETR) formula under step 4. Notably, unlike GILTI, where the computation is on a worldwide basis, the computation of GloBE Income or Loss applies on a jurisdictional basis and not a per entity basis. Hence, under the jurisdictional blending (per-country blending) approach, all of a constituent entity’s GloBE Income or Losses are aggregated to arrive at the net GloBE Income or Loss of a particular jurisdiction.

Under article 3.1, the starting point is the net income or loss used for preparing the Consolidated Financial Statements of the ultimate parent entity before eliminating intra-group transactions. Such net income or loss is adjusted to eliminate specific book-to-tax differences (nine adjustment items under article 3.2.1 and ten under articles 3.2.2 to 3.2.11). Notably, shipping income, subject to certain conditions, is explicitly excluded under Article 3.3. Finally, the GloBE Income or Loss is allocated between a permanent establishment and the head office (main entity) or to owners of a flow-through entity under the local tax treatment.

Step 3:

Computation of Adjusted Covered Taxes

Under step 3, an MNE is required to calculate the “adjusted covered taxes.” Effectively, article 4.2.1. provides four types of taxes that are included in the definition of covered taxes, and Article 4.2.2. provides five types of taxes that are excluded. Like step 2 above, the calculation of the adjusted covered taxes applies on a jurisdictional basis and is the numerator of the ETR formula under step 4.

By article 4.1, the starting point in calculating the adjusted covered taxes is the current tax expense accrued for the financial accounting net income or loss. Further, under the same article, the GloBE Rules provide certain adjustments (additions under article 4.1.2 and reductions under article 4.1.3 to the current tax expense).

Moreover, under article 4.4. The current tax expense is adjusted to reflect certain timing differences (deferred tax adjustments and prior year losses). Then, under article 4.3. Covered taxes are allocated to other constituent entities if necessary. Finally, where there is a post-filing adjustment, for example, during a tax audit or filing a revised tax return to correct an error, the ETR is recalculated to reflect such adjustments. Consequently, under article 4.6, increases in tax amounts for prior years are added to covered taxes in the current fiscal year.

Step 4:

Computation of Effective Tax Rate and Top-Up Tax

Step 4 provides the mechanism for calculating the topup tax on a jurisdictional basis where a jurisdiction’s effective tax rate is below 15%. In doing so, an MNE should, under article 5.1., determine the ETR for all jurisdictions; that is, the amount computed according to step 3 above—the sum of adjusted covered taxes of each constituent entity located in a jurisdiction— divided by the amount computed under step 2 above, (the net GloBE Income of a jurisdiction).

According to article 5.2.1., if the ETR is lower than 15%, for example 8%, then the top-up tax percentage needs to be calculated—for example,15% minus 8% equals 7%. In accordance with article 5.2.2., to determine the top-up tax amount, the top-up tax percentage is then multiplied by the jurisdictional excess profit (Net GloBE Income minus Substance-based Income Exclusion).

Lastly, under article 5.2.3., any Qualified Domestic Minimum top-up tax can reduce the top-up tax amount to zero. Such top-up tax amount is then allocated to the constituent entity in the jurisdiction in proportion to its GloBE Income.

Notably, under article 5.5. there is a de minimis exclusion for MNEs that have an average GloBE revenue that is less than 10 million euros; and an average GloBE Income that is either a loss or less than 1 million euros.

Finally, the OECD will develop safe harbor rules to further reduce the compliance burden. Such safe harbor rules are expected to be released later this year.

Step 5:

Impose Top-Up Tax Under the GloBE Rules

Under this final step, the top-up tax calculated under step 4 is first imposed using the IIR top-down approach or the backstop mechanism of UTPR. Therefore, an MNE group needs to identify the ultimate parent entity that is liable to apply the IIR for all constituent entities based on the top-down approach. The top-up tax is then attributed to the parent entities in proportion to their allocable share. For any top-up tax amount that was not allocated (i.e., the parent entity jurisdiction(s) is either a low-tax jurisdiction or did not implement the GloBE Rules), the backstop mechanism, namely UTPR, will apply.

Further, the UTPR is limited when an MNE is in its initial phase of expanding abroad.

Finally, the GloBE Rules provide for a mechanism on how to allocate the UTPR top-up tax among the UTPR jurisdictions based on the following two factors: the net book value of tangible assets held; and the number of employees employed by all constituent entities that are located in such UTPR jurisdictions.

The mechanism to collect the UTPR top-up tax amount will be via a denial of any deductible expense (i.e., UTPR adjustment) which is similar to BEPS action 4 interest limitation rule.

Planning Points: Going Forward and Impact on MNEs

The impact of the Pillar Two Rules for in-scope MNEs will be at least twofold.

First, taking into consideration that Pillar Two aims to ensure that large internationally operating businesses pay a minimum level of tax, being an effective tax rate of 15% regardless of where they are headquartered or operate, it will arguably have an impact on their overall tax burden.

Second, to ensure compliance with Pillar Two, MNEs will need to be able to calculate the jurisdictional topup tax in each country where they operate and allocate any top-up tax amount accordingly.

On the one hand, many of the GloBE Rules are simple to use. For example, in-scope MNEs are those that exceed the country-by-country reporting threshold, and the starting point for the calculation of top-up tax is the entity level financial information as used by the parent financial accounting standards. On the other hand, the GloBE Rules are 60 pages long (including 15 pages of definitions), accommodating a diverse range of tax systems and without taking into consideration the multilateral instrument to apply the tax treaty rules (STTR and SOR).

Thus, it is necessary to have a specialized team in place that has an understanding of both international accounting standards and international tax systems to be able to calculate precisely the jurisdictional ETR.

Going forward, in-scope MNEs are advised to take the following actions:

• Identify the jurisdictions where the STTR applies (developing countries) and assess the impact of the 9% withholding tax concerning covered payments.

• Perform a jurisdictional ETR materiality testing and impact assessment.

• as gathering the data to apply the Pillar Two Rules will be one of the biggest challenges facing MNEs, they should identify any data gaps that they might struggle to obtain and perform their data calculations, for example, when calculating the Substance-based Income Exclusion amount for each jurisdiction being the sum of the payroll carve-out and the tangible asset carve-out for each constituent entity;

• Make a preliminary calculation of the jurisdictional top-up tax in each country that they operate in and identify what monetary amount should be allocated to each one.

• Determine in which jurisdiction(s) the IIR might apply, based on the top-down approach.

• Ιn case such jurisdictions refrain from implementing the GloBE Rules (staying IIR-free), then the potential UTPR jurisdictions need to be identified; and

• Finally, even though the Pillar Two Rules are not entirely new, their functionality differs from the current international tax rules, so proper training will be required for MNEs’ in-house tax teams to be able to accurately calculate the jurisdictional top-up tax in each country where they operate.

SITE TOUR

ICPAC'S POSITION IN THE PUBLIC CONSULTATION MONITORING & COMPLIANCE

In 2024, ICPAC launched a new "Monitoring & Compliance" tab on its website, providing easy access to a wide range of compliance-related resources. This includes Compliance Circulars, Guides, information on sanctions & restrictive measures, training materials, templates, and more. The new section aims to support members and the public by centralizing all compliance information in one convenient location.

ICPAC ISSUES TECHNICAL CIRCULARS FOR THE TECHNICAL SUPPORT OF ITS MEMBERS.

The technical circulars of ICPAC aim at informing the members as regards changes or amendments of regulations and procedures relating to the accounting/auditing profession, which stem either from ambiguities or omissions that are identified during accounting or auditing work, or from harmonisation directives of the European Union for the accounting/auditing profession. Find the most recent technical circulars sent to the members below.

WHAT IS CPD?

Continuous Professional Development (CPD) is the learning and development activity that you will do throughout your ICPAC membership. CPD will provide you with the knowledge and skills required to perform your day-to-day job in your chosen professional role, as well as to enhance your employability for the future.

FIND MORE …

BUSINESS & ECONOMY

The Importance of Corporate Governance

Dimitra Apostolaki TECHNICAL AND PROFESSIONAL MATTERS OFFICER AT ICPAC

Corporate governance, though widely discussed in economic and legal literature, can be broadly defined as the system by which organizations are directed and controlled. But why is it so important for organizations?

Effective corporate governance promotes transparency, accountability, and fairness in an organization’s relationship with its stakeholders. It involves implementing rules, controls, and policies that promote ethical behavior and a healthy organizational culture.

In Cyprus, the 2013 banking crisis exposed serious shortcomings, particularly in corporate governance and risk management, revealing how poor oversight can extend to severe national consequences.

Ιnvestor Perception Shapes Behavior

Corporate governance has long been the focus of academic and professional attention, with studies examining how it influences a wide range of business outcomes. For example, numerous empirical studies have explored the relationship between corporate governance and firm performance. While the majority suggest a positive correlation, some question the causality of this link, noting that financial performance is often shaped by a range of interrelated factors beyond governance alone.

In any case, recent trends highlight a shift in investor priorities. Today, many investors are looking beyond financial results when assessing an organization’s value. According to PwC’s Global Investor Survey

EFFECTIVE CORPORATE GOVERNANCE PROMOTES TRANSPARENCY, ACCOUNTABILITY, AND FAIRNESS IN AN ORGANIZATION’S RELATIONSHIP WITH ITS STAKEHOLDERS. IT INVOLVES IMPLEMENTING RULES, CONTROLS, AND POLICIES THAT PROMOTE ETHICAL BEHAVIOR AND A HEALTHY ORGANIZATIONAL CULTURE.

2024, which gathered insights from 345 investors and analysts across 24 countries and territories, corporate governance—including oversight, risk management, controls, and ethics—is considered the most important non-financial factor in organization valuations. This shows that even if the link mentioned above isn’t certain, strong governance is something investors take seriously, and their perception can strongly influence business decisions and outcomes.

Corporate Governance Today

Nevertheless, in today’s world, corporate governance is far more complex than it once was. It is continuously being redefined by a range of critical forces, including emerging trends and challenges, that are reshaping traditional norms. As such, it is fair to say that corporate governance functions as a dynamic system.

Boards must remain vigilant and responsive to changes, as these have a direct impact on how organizations function and make strategic choices. It seems that adapting to changes is essential. Failure to do so may leave organizations uncompetitive and at risk of falling behind in an ever-evolving landscape.

Current trends and challenges

But what are the most important challenges that today’s boards are facing? There are quite a few:

from evolving regulatory frameworks and societal expectations to increased board scrutiny, shifting economic conditions, cybersecurity trends, competition for talent, political volatility, and more. Nevertheless, at the current moment, two stand out as particularly pressing: the evolution of artificial intelligence (AI) and the growing emphasis on environmental, social, and governance (ESG) factors.

Organizations are under significant pressure to adopt AI technologies, but doing so also requires refining existing infrastructure and oversight mechanisms to ensure effective AI governance. This governance role is critical because AI adoption can lead to unintended outcomes that boards need to manage, including ethical concerns, data privacy and security risks, cybersecurity vulnerabilities, and a lack of accountability, which is an essential principle of an effective corporate governance framework.

At the same time, growing societal demand for responsible business practices has contributed to the adoption of the EU’s Corporate Sustainability Reporting Directive (CSRD). Certain organizations falling within the scope of the CSRD are now required to report on their social and environmental impacts. This increased transparency is closely linked to corporate governance, as it pushes boards to integrate ESG considerations into their core operations and acknowledge that sustainable practices are essential for long-term shareholder value.

BUSINESS & ECONOMY

Cyprus Takes Bold Step Towards Strengthening Its Defensive Tax Measures Recent Amendments to the Income Tax Law and Law on Assessing and Collecting Taxes

Arofat Salayeva FOUNDER & MANAGING DIRECTOR OF AROSAL PRESIDENT OF THE CYPRUS-UZBEKISTAN BUSINESS ASSOCIATION

On 10 April 2025, the Cyprus House of Representatives approved significant amendments to the Cyprus Income Tax Law (ITL) and the Law on the Assessment and Collection of Taxes. These changes, enacted through the “Amending Laws of 2025,” mark a pivotal step in Cyprus’s commitment to aligning its domestic tax framework with EU-wide initiatives aimed at curbing aggressive tax planning.

This legislative package introduces enhanced withholding tax (WHT) obligations and new deductibility restrictions on outbound payments to low-tax and non-cooperative jurisdictions. Supplemented by detailed Decrees issued on 17 April 2025 by the Council of Ministers, these measures strengthen Cyprus’s defences against base erosion and profit shifting (BEPS) and underscore its compliance with the EU Recovery and Resilience Plan.

This article explores the key provisions of the new framework, the scope of application, and the technical and practical implications for Cyprus-resident companies.

Legislative Background and Policy Rationale

The enactment of the Amending Laws reflects Cyprus’s proactive approach in fulfilling its obligations under the EU’s Recovery and Resilience Facility. The objective is clear: enhance tax transparency, limit profit shifting through low-tax and noncooperative jurisdictions and establish Cyprus as a cooperative and credible jurisdiction in global tax governance.

The new legislation supplements the tax measures introduced on 1 January 2023 targeting jurisdictions on the EU list of noncooperative jurisdictions (“EU Blacklist”). As of 1 January 2026, this regime will be extended to include jurisdictions that qualify as “low-tax jurisdictions” (LTJs), defined based on a statutory corporate income tax (CIT) rate lower than 50% of Cyprus’s standard rate—i.e., lower than 6.25%.

“Tax havens are less about the absence of tax, and more about the absence of transparency.”

— Richard Murphy

Key Amendments to the Income Tax Law

1. New Definitions under Article 2

The ITL now includes three critical definitions:

• Low-tax jurisdiction (LTJ): A jurisdiction with a CIT rate lower than 6.25%.

• Non-low-tax jurisdiction: Any jurisdiction not falling under the LTJ definition.

• Non-cooperative jurisdiction: A jurisdiction listed in Annex I of the Official Journal of the EU as of the prior calendar year and the most recent version in force. These definitions serve as the cornerstone for determining the application of the new defensive tax measures.

2. Non-Deductibility of Payments (Article 11)

Interest and royalty payments made to recipients in LTJs or to entities not resident in non-low-tax jurisdictions will no longer be tax-deductible, irrespective of whether they have been paid or merely accrued.

Exceptions may apply, subject to further clarification by Decrees.

3. Withholding Tax on Royalty Payments (Article 21A)

A 10% WHT will be imposed on royalties paid to non-residents incorporated in a non-cooperative jurisdiction, provided the payee is not tax resident in another jurisdiction that is also noncooperative. This clause supplements the existing Article 21 and will not apply where payments are already captured under the existing provisions.

4. Double Tax Treaty Renegotiations (Article 34)

Cyprus is now obligated to initiate renegotiation of any Double Tax Treaties with LTJs or non-cooperative jurisdictions within three years of their classification under the relevant definition or listing. This measure ensures that existing treaties are not exploited for treaty-shopping purposes.

Scope and Application of the Rules

The new provisions apply to outbound payments (dividends, interest, royalties) made to associated entities—directly or indirectly—when the recipient is:

• Incorporated or resident in an LTJ;

• Listed on the EU blacklist; or

• Operating through a PE in the above jurisdictions.

An association exists when one party, alone or jointly with others, holds more than 50% of the shareholding, voting rights, or control in the counterparty.

Importantly, even where a PE is maintained by a company not located in an LTJ or non-cooperative jurisdiction, the new provisions will still apply if the PE itself is situated in such a jurisdiction.

Administrative Fines under the Assessment and Collection of Taxes Law

Failure by the Cyprus paying entity to provide required documentation within 60 days of a formal request by the Tax Department will trigger escalating administrative penalties:

• €2,000 for delays between 61 and 90 days;

• €4,000 for delays between 91 and 120 days;

• €10,000 for delays beyond 120 days or full non-compliance. These penalties reflect the increasing importance placed on proper documentation and tax governance.

“A structure that lacks economic substance is one that merely exists on paper and serves no other function than to avoid tax.”

— OECD BEPS Action Plan CYPRUS TAKES

Clarifications through Decrees: Substance and AntiAbuse Provisions

On 17 April 2025, the Council of Ministers issued a Decree under the ITL providing detailed guidance on how Cyprus entities should interpret and implement the anti-abuse provisions.

This Decree introduces minimum substance requirements for income recipients located in LTJs and/or non-cooperative jurisdictions, particularly in cases where no tax is withheld due to an applicable exemption.

Documentation Requirements

Cyprus paying entities must retain evidence (for at least six years) that the recipient company meets at least five out of the following six criteria:

1. Decision Making:

At least one Board member is qualified and authorized to make strategic decisions related to income-generating activities.

2. Presence:

A qualified Board member resides or is within commuting distance of the jurisdiction.

3. 4. Office Space:

5.

6.

The recipient has access to functional office premises in its jurisdiction.

Board Meetings:

Most Board meetings are held in the jurisdiction of tax residency.

Operational Expenses:

Expenses incurred within the jurisdiction are proportional to the company’s declared activities.

Beneficial Ownership:

The recipient entity does not act as a conduit, merely passing income to related entities while realizing minimal taxable income. Failure to meet these conditions may trigger WHT and deny deductions, unless the taxpayer can demonstrate that the transaction reflects genuine commercial purposes and economic substance.

Conclusion

The Amending Laws of 2025, together with the supporting Decree, represent a decisive move by Cyprus towards international tax integrity and alignment with OECD and EU best practices. Tax professionals, CFOs, and corporate groups with cross-border structures involving Cyprus must proactively assess their operations, identify potential exposures, and ensure compliance with both substance requirements and documentation obligations. While the enhanced framework introduces complexity, it also reinforces Cyprus’s standing as a robust and cooperative jurisdiction in the global tax landscape. Early planning, diligent record-keeping, and clear commercial rationale will be key in navigating the new rules and avoiding the imposition of WHT, denial of deductions, or administrative fines.

IFAC NEWS

A quick look at IFAC’s most important recent initiatives

IFAC, by connecting and uniting its members, makes the accountancy profession truly global

IFAC and PAFA Expand Capacity Strengthening in Africa with $1M Grant from the Global Fund The expanded program will focus on strengthening national PAOs in Tanzania and Togo, embedding professional learning programs, and enabling public sector institutions to recruit and retain qualified professionals who can lead on integrity, performance, and good governance.

IFAC and PAFA Reaffirm Partnership, Enhance Joint Activities in Africa to Accelerate Development of the Profession and Leverage Efficiencies - IFAC and PAFA reaffirmed their strategic partnership, committing to amplify their collective impact, deliver greater value for their members, and support Africa’s economic transformation and growth.

IFAC Connect – This new, branded global event series is designed to bring IFAC’s convening power directly to different regions. At IFAC Connect events, PAOs, professional services firms, standard setters, regulators, development banks, businesses, investors, and other regional leaders share insights and develop solutions that align with global baselines and address regional challenges and opportunities. IFAC Connect is coming to four regions in 2025: Africa, MENA, Latin America, and Asia Pacific.

Global Solutions Must Reflect Regional Realities - Now in its second year, IFAC Connect is a platform for engagement and action. Stakeholders share insights and develop solutions that align with global baselines, and local leaders are empowered to drive transformation.

IFAC member organizations are champions of integrity and professional quality, and proudly carry their membership as a badge of international recognition

IFAC Seeks Input on Proposed Revisions to Its Statements of Membership Obligations – IFAC has launched a public consultation on targeted revisions to its Statements of Membership Obligations (SMOs),

a cornerstone of IFAC and its members’ commitment to a strong and sustainable global accountancy profession. Feedback can be provided via a response template form, available on the IFAC website. The consultation is open until August 8, 2025.

IFAC Adoption & Implementation Questionnaire (2025)

Key standard-setting developments are taking place in audit, ethics, public sector, education, and sustainability, and IFAC wants to be informed about adoption efforts in members’ jurisdictions to provide effective support. Please complete this brief questionnaire.

Accountancy Education:

• IFAC Enhances International Education Standards to Equip Professional Accountants for Sustainability Reporting - IFAC finalized revisions to the International Education Standards to embed sustainability throughout aspiring professional accountants’ training. Additionally, IFAC has modernized IES 6, Initial Professional Development – Formal Assessment of Professional Competence. IFAC calls on all stakeholders to begin preparing for implementation, with early adoption encouraged ahead of the July 1, 2026, effective date.

• Enhancing the Appeal of the Accounting Profession: A New Multi-Stakeholder Study Seeks Insights. We need your support in getting this survey to high school teachers, career counselors, accounting faculty, and employers in your country! IFAC and its partners are conducting a global research study to explore perceptions of the accountancy profession and to identify factors that influence its appeal and accessibility. Automated translation functionality has been added to the surveys to assist non-English speakers in participating in the survey. Respondents are welcome to respond in their language. The survey will be open until the end of May 2025. Please share the following link with the relevant stakeholders in your country: High School Teachers, Career Counsellors, Accounting Faculty, and Employers. Survey

• Does your organization have an accomplishment that supports the advancement of accountancy education that we can include in the IFAC Accountancy Education

E-Tool and share across the network? Please send to education@ifac.org.

IFAC Offers Digital Access to: Accountancy Education (IES); and the Statements of Membership Obligations (SMOs).

Pathways to Accrual – IFAC launched a digital platform, providing a central access point to resources helpful for governments and other public sector entities planning and undertaking a transition from cash to accrual accounting, including adopting and implementing International Public Sector Accounting Standards (IPSAS). If your jurisdiction has a case study or resource to share, let us know!

IFAC and its members work together to shape the future of the profession through learning, innovation, a collective voice, and commitment to the public interest

Four Key Actions for Young Professionals to Drive Sustainability Reporting - The IFAC Young Leaders Collective calls on colleagues and young accountancy professionals to stand up and lead the implementation of these standards in the organizations. The four actions described provide a roadmap for young professionals to be at the center of this global movement.

More Global Companies Seek Assurance on Sustainability Reporting, Study by IFAC, AICPA & CIMA Shows - Almost 3-in-4 of the largest global companies sought assurance on some aspect of their sustainability disclosures, according to an updated report from IFAC and AICPA & CIMA. The study marks the fifth annual benchmark that now includes 2023 data.

IFAC and the Edinburgh Group launch a global survey of small- and medium-sized entities (SMEs) about sustainability information — The objective is to better understand the extent to which sustainability-related information is being prepared by SMEs, used by SMEs in internal decision-making, or provided to supply chains, lenders, or other stakeholders. With the data we gather, we’ll be able to better support SMEs with best practices and advocate for appropriate SME sustainability-related reporting and assurance rules and regulations. Please

see this short video for more information. The survey is open in seven languages (Arabic, Chinese, English, French, Portuguese, Spanish, and Turkish) until June 30, 2025.

IFAC’s News Page: Please save for your continuous reference, IFAC’s news page.

The news page will feature the latest updates and publications released by IFAC.

IFAC’s Global Knowledge Gateway: Please save for your continuous reference IFAC’s Global Knowledge Gateway for insights, resources, and tools from leading voices in accountancy and business. New articles on the Gateway:

• Strengthening Accountancy in Laos: AFA Mentoring Partnership between MIA and LCPAA

• Lebanon Case Study: Strategic Transformation through Leveraging the IFAC Strategic Planning Toolkit

• The Saudi Arabian Public Sector’s Journey to Accrual Accounting: Lessons Learned and Key Insights

• The State of Play in Sustainability Assurance

• Webinar Recordings Available: Elevating Education to Meet Global Sustainability Demands

• Strengthening Public Trust: Why the World Needs More Professional Accountants in Government

• Sustainability Reporting in Türkiye: A Localized Approach to Global Alignment

PAO Digital Readiness: Explore IFAC’s PAO Digital Transformation Series webpage, which is regularly updated with additional articles, videos, and resources!

Events

IFAC’s Events Page: Please save for your continuous reference IFAC’s events page. The Events page will feature free events held by IFAC, the independent standard-setting boards, IFAC member organizations, and the Forum of Firms. If you have an upcoming event, you would like included on the Events page, please e-mail me.

• IFAC Speaker Request Form — IFAC is introducing a Speaker Request Form to help facilitate and centralize all stakeholder requests for IFAC speakers at events. A link to the Form will be available toward the bottom of

the IFAC homepage when you are logged into your IFAC website account. As we introduce this new system, you may still send speaker requests to your IFAC key contact; however, you will also be asked to submit the Speaker Request Form as well to ensure a smooth process and response time.

September

7 - 9, 2025

Lisbon, Portugal, hosted by the Ordem dos Contabilistas Certificados

IPSASB Public Sector Standard Setters Forum 2025

Join the IPSASB’s 5th Public Sector Standard Setters Forum. It is your chance to be involved in the process of setting the future work program for both financial and sustainability reporting in the public sector.

This exclusive event brings public sector standards setters from around the world together to build dialogue, exchange ideas, and provide insights around critical issues in order to shape the IPSASB’s future priorities.

Register your interest in attending by July 25!

International Foundation for Ethics and Audit (IFEA)

The International Foundation for Ethics and Audit (IFEA or the Foundation) is a non-profit organization that supports high-quality, international standard-setting in ethics, audit, and assurance in the public interest. The Foundation fulfills its mission through its two standard-setting boards, the International Auditing and Assurance Standards Board and the International Ethics Standards Board for Accountants.

• IAASB and IESBA Unveil New Standards and Guidance to Strengthen Sustainability Reporting and Assurance - IAASB and IESBA launched an integrated effort to support effective implementation of their landmark standards aimed at advancing trust and transparency in sustainability reporting and assurance.

• Questions & Answers on the International Foundation for Ethics and Audit - Stakeholders are encouraged to visit the IFEA’s website and Q&A to learn more about the Foundation.

• SAC Press Release: IAASB-IESBA Stakeholder Advisory Council Advises on Advancing Standard Setting in the Public Interest - The SAC convened in New York on May 5-6, providing strategic advice to the two boards on key challenges and opportunities in global standard setting for audit, assurance, and ethics, including independence.

International Ethics Standards Board for Accountants® (IESBA®) News

• IESBA Staff Releases Q&As on the Tax Planning and Related Services Standards in the IESBA Code — IESBA released a questions and answers (Q&A) publication to support the adoption and implementation of the IESBA Tax Planning and Related Services Standards. The Q&A publication is designed to highlight, illustrate, or explain aspects of the standards and is intended to complement the Basis for Conclusions for the final pronouncement.

• Now Available: IESBA Handbook 2024 Edition - IESBA released the 2024 Handbook of the International Code of Ethics for Professional Accountants (including International Independence Standards). This handbook replaces the 2023 edition. The back of the 2024 Handbook contains the IESBA-approved revisions to the Code addressing Tax Planning and Related Services, which will become effective after July 1, 2025.

Open

for Comment

• Collective Investment Vehicles and Pension Funds - Auditor Independence - IESBA has launched a public consultation to gather feedback on auditor independence for audits of Collective Investment Vehicles (“CIVs”) and Pension Funds (“Investment Schemes”). Stakeholders are encouraged to submit their feedback electronically through the IESBA website by June 30, 2025.

Effective Dates

• Public Interest Entities (PIE) related revisions — Effective for audits of financial statements for periods beginning on or after December 15, 2024.

Visit IESBA’s dedicated Strengthening International Independence Standards webpage for further guidance and resources on NAS, Fee-related, and PIE revisions.

• IESBA Strengthens Global Ethics Standards to Respond To Transformative Effects Of Technological Innovation — Effective as of December 15, 2024.

• IESBA Launches First Global Ethics Standards On Tax Planning — IESBA launched the first comprehensive suite of global standards on ethical considerations in tax planning and related services, incorporated in the IESBA Code of Ethics. Revisions will be effective as of July 1, 2025.

Upcoming Meeting

• June 9-12, 2025

International Auditing and Assurance Standards Board (IAASB)

News

• New FAQ on Going Concern Now Available from IAASB - IAASB has published a Frequently Asked Questions (FAQ) document to support stakeholders. Specifically, it focuses on the implications for the auditor’s report when reporting entity-specific going concern matters in a section titled ‘Going Concern’ or ‘Material Uncertainty Related to Going Concern.’ It also provides an illustrative example of an auditor’s report that provides a description of how the auditor evaluated management’s assessment of going concern.

• IAASB Strengthens Auditor Responsibilities for Going Concern through Revised Standard - IAASB released its revised International Standard on Auditing 570 (Revised 2024), Going Concern.

• IAASB Announces Withdrawal of ISAE 3410 for Assurance Engagements on Greenhouse Gas Statements - IAASB has approved the withdrawal of ISAE 3410, Assurance Engagements on Greenhouse Gas Statements. IAASB approved revisions to ISA 240 — At its March meeting, the IAASB approved revisions to ISA 240, The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements. ISA 240 (Revised) now awaits certification by the PIOB, which is anticipated in July. The full text of the as-approved standard is available on the IAASB website here (“20250318-IAASBFraud-Agenda Item 2-J-Proposed ISA 240 (Revised) Approved Clean 0”).

• IAASB Releases Comprehensive Implementation Guide for the ISA for LCE — IAASB released a new first-time implementation guide for the ISA for LCE.

The guide provides an overview of the standard’s concepts, structure, and format. It offers step-by-step

insights into each Part of the standard with examples and comparisons to ISAs, equipping practitioners with the tools to effectively implement the ISA for LCE.

• IAASB Approves ISSA 5000 — The IAASB published International Standard on Sustainability Assurance (ISSA) 5000. The standard will serve as a comprehensive, stand-alone standard suitable for any sustainability assurance engagement.

To support effective implementation of ISSA 5000, the IAASB has launched an online submission form for stakeholders to submit implementation questions or matters for the IAASB’s consideration. Full details and a link to the form are available on the IAASB website: www.iaasb.org/ISSA5000.

• New IAASB Handbook Now Available for Digital Access and Print Orders - The IAASB has released the 20232024 edition of the Handbook of International Quality Management, Auditing, Review, Other Assurance, and Related Services Pronouncements.

The 2023-2024 Handbook is available as a PDF download and for print orders via the IAASB website.

Open for Comment

• IAASB Requests Feedback on Proposed Narrow-Scope Amendments Related to Working with Experts - The IAASB invites all stakeholders to comment using the digital Response Template, which is available on the IAASB website. Feedback is requested by July 24, 2025.

Effective Dates

• IAASB Quality Management Standards — effective date was December 15, 2022. Explore more on the Quality Management Standards by also accessing IFAC’s dedicated Quality Management page to view articles, webinars, videos, implementation guides and more resources.

• International Standard on Auditing 600 (Revised) — Effective for audits of group financial statements for periods beginning on or after December 15, 2023. The Basis for Conclusions and a Factsheet are available to support implementation.

• Narrow Scope Amendments to ISA 700 (Revised), Forming an Opinion and Reporting on Financial Statements; and ISA 260 (Revised), Communication with Those Charged with Governance — Effective for audits of financial statements for periods beginning on or after December 15, 2024.

• International Standard on Auditing for Audits of Financial Statements of Less Complex Entities – Effective for audits beginning on or after December 15, 2025, for jurisdictions that adopt or permit its use.

• ISSA 5000 General Requirements for Sustainability Assurance Engagements — Effective for assurance engagements on sustainability information reported for periods beginning on or after December 15, 2026.

• International Standard on Auditing 570 (Revised 2024), Going Concern - effective for audits of financial statements for periods beginning on or after December 15, 2026.

Upcoming Meeting

• June 16-18, 2025

International Public Sector Accounting Standards Board® (IPSASB®) News

• IPSASB Proposes Aligning Materiality Definition Across the Conceptual Framework and IPSAS Accounting Standards – IPSASB has released IPSAS Exposure Draft (ED) 93, Definition of Material (Amendments to IPSAS 1, IPSAS 3, and the Conceptual Framework). This ED seeks to provide more consistent guidance on materiality across the IPSASB’s financial reporting literature to assist entities in its application, and help them to develop clearer, more useful financial reports.

To facilitate stakeholder engagement, this project will be undertaken in three distinct phases. Comments on the IPSAS Exposure Draft are requested by July 14, 2025.

• The IPSASB’s 5th Public Sector Standard Setters Forum is your chance to be involved in the process of setting the future work program for both financial and sustainability reporting in the public sector. The IPSASB’s 2025 Public Sector Standard Setters Forum, Shaping Tomorrow Together, will be held from September 7 to 9 in Lisbon, Portugal, hosted by the Ordem dos Contabilistas Certificados (Order of Certified Accountants).  Register your interest to attend by July 25.

Open for Comment

• IPSAS Exposure Draft (ED) 93, Definition of Material (Amendments to IPSAS 1, IPSAS 3, and the Conceptual Framework) - The objective of IPSAS ED 93 is to align the definition of material between the Conceptual Framework and IPSAS Accounting Standards. IPSAS ED 93 is open for public comment through July 14, 2025.

Effective Dates

Effective January 1, 2025

• IPSAS 43, Leases

• IPSAS 44, Non-current Assets Held for Sale and Discontinued Operations;

• IPSAS 45, Property, Plant, and Equipment;

• IPSAS 46, Measurement,

Effective January 1, 2026:

• IPSAS 47, Revenue;

• IPSAS 48, Transfer Expenses;

• IPSAS 49, Retirement Benefit Plans

Effective January 1, 2027:

• Concessionary Leases and Other Arrangements Conveying Rights over Assets (Amendments to IPSAS 43, IPSAS 47, and IPSAS 48);

• IPSAS 50 and Amendments to IPSAS 12.

Upcoming Meeting

June 10-13, 2025

IFRS Foundation

View the IFRS Foundation’s monthly summaries here.

Translations

To view the list of completed and in progress translations, please visit the IFAC Translations Database – this link also provides you access to the online permission requests and inquiry system where you can manage existing requests or begin a new one.

VISION

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Tel.: +357 22870030

Fax: +357 22766360

Ε-mail: info@icpac.org.cy www.icpac.org.cy