International lenders struck a deal on Saturday to hand Cyprus a bailout worth 10 billion euros ($13 billion) to stave off bankruptcy, a senior euro zone official said.
Cyprus is the fifth country after Greece, Ireland, Portugal and Spain to turn to the euro zone for financial help in the wake of the sovereign debt crisis that started in 2010.
After 10 hours of talks through the night, finance ministers from the currency bloc and IMF chief Christine Lagarde agreed to a package, smaller than initially expected, mainly needed to recapitalise the Mediterranean island's banks which were hit hard by a sovereign debt restructuring in Greece last year.
Under the emergency lending programme, Cyprus agreed to increase its nominal corporate tax rate by 2.5 percentage points to 12.5 percent, the senior source involved in the negotiations said.
Nicosia will also impose a 9.9 percent one-off levy on deposits above 100,000 euros in Cypriot banks and a tax of 6.75 percent on smaller deposits.
There will also be a tax on interest that the deposits generate, the official said