tax requirements cyprus

Tax filing requirements for Cyprus registered companies

Tax year

The tax year in Cyprus is the calendar year i.e., January 1st to December 31st.

Do I need to file a tax return for my Company?

Every Cyprus tax resident company is required to annually prepare audited or reviewed financial statements and file its Tax Return (TD4) based on these financial statements.

When is the tax return due?

The tax returns are filed electronically no later than the 31st of March of the second year thereafter e.g., the tax return of the year 2021 must be filed no later than 31st March 2023.

Who should file the tax return?

The tax returns must be filed by a local licensed auditor or tax consultant. The auditor or the tax consultant is required to sign the Tax Return of the company declaring that the information contained in the return are as per the financial statements and the tax computations have been checked and are in compliance with the circulars of the Tax Department.

What does the tax return include?

The Tax Return includes financial information derived from the financial statements together with a calculation of the company’s taxable income and tax charge for the year. If the Company incurred a tax loss during the year, then the loss can be carried forward for up to 5 years and be set off with future taxable profits.

Do the Financial Statements of the Company need to be filed with the tax authorities?

The Company does not need to file its financial statements with the tax authorities but should be provided to the tax authorities upon the tax departments request.

When does the Company need to pay it's taxes?

Through temporary tax assessments.

Every company which has taxable income must file by the 31st of July of the same tax year, an estimate of the expected taxable income for the full tax year. The temporary tax assessment payment on such taxable income is payable in two equal instalments by the 31st of July and by the 31st of December of the same year.

If the tax estimated is not paid by the above due dates a penalty of 5% on the due amount is imposed and interest at 1,75% per annum is charged. Interest is calculated based on complete months. However, even though the due dates for the payment of the instalments are 31st of July and 31st of December, if installments are paid before the 31st of August and 31st of January respectively, there should be no penalties and charges, as interest and penalties are calculated on a complete month’s basis.

The estimate of taxable income may be revised at any time before 31st of December in the tax year.  If the estimate is revised upwards, interest is payable on the difference between the revised amount of tax payable and the amount initially declared, from the due date of payment of each instalment.

What if there is a difference between the temporary assessment and the final tax?

The difference, if any, between the actual tax payable and the temporary tax already paid through self-assessment is payable by the 1st of August in the year following the tax year.

However, if the estimated taxable income is less than 75% of the actual taxable income for the year, then a penalty of 10% is imposed on the difference between actual tax payable and the temporary tax paid.

If the final tax is not paid by the due date a penalty of 5% is imposed on the due amount and interest at 1,75% per annum is charged.

What if I overpay?

Any tax to be refunded carries interest at 1,75% per annum as from the 1st of January of the year following the tax year.

* The above article does not constitute tax advice but is intended as general guidance on the tax filing requirements of Cyprus registered companies.