Cyprus' tax year follows the calendar year with annual tax returns filled within three months from the year end (March 31st,assuming a 31 December year-end).Companies that prepare audited financial statements are obliged to submit their tax returns electronically.
Provisional tax returns are payable in two equal instalments on the 1st August and 31st December. Should there be any balance of tax remaining it is payable by the 1st of August of the following year.
The table below displays a summary of the important obligations for a corporate company in the calendar year.
End of each month
- Payment of tax deducted from employees salary (PAYE) in the preceding month.
- Payment of special contribution for defense withheld on payments of dividends, interest or rents (when the tenant is a company, partnership, the state or local authority) made to Cyprus tax residents in the preceding month.
- Payment of tax withheld in the preceding month on payments to non-Cyprus residents
- Submission of declaration of deemed dividend distribution (IR623) for the year ended 31 December 2010.
- Electronic submission of the corporation tax return (IR4) for accounting periods ending on 31 December of the preceding year (IR4).
- Payment of special contribution for defense for the first six months of the year on rents and on dividends or interest from sources outside Cyprus.
- Electronic submission by employers of the total payroll (Form IR7).
- Submission of the current year provisional tax return and payment of the first installment.
- Payment of the previous year’s final corporation tax under the self-assessment method.
- Payment of immovable property tax for the current year (10% discount if paid by 15 October).
- Payment of provisional tax - second and last installment for the current year.
- Payment of special contribution for defense for the last six months of the current year on rents and on dividends or interest from sources outside Cyprus.
Effective from 3 July 2017, the government has introduced procedures for settling of the outstanding tax debts program. The procedures apply for outstanding tax debts up to 31 December 2015, provided that all returns due up to that date have been filed and any taxes due after that date have been paid or arranged to be paid. A taxpayer may file an application for taking part in the program within 3 months from the entry into force of the Law. This deadline for taking part in the program has now been extended to 3 July 2018.
The program only accepts single lump sum payments during the first two weeks, in which case a 95% reduction of additional financial charges is provided. For taxpayers not making a lump sum payment, the outstanding tax debt may be paid in up to 54 monthly installments if the amount is up to EUR 100,000, and in 60 monthly installments if the amount is over EUR 100,000. The program covers most Cyprus taxes, including income tax, special contribution for the defense of the republic, property tax, capital gains tax, stamp duty, value added tax, and certain other contributions. Application for tax payment procedures should be made within three months, and if a tax debt is in dispute, the dispute must be dropped in order to take advantage of the program.