All Cyprus registered companies have an obligation to file provisional income tax declaration and make the payment of the first income tax instalment by 31 July 2015, the latest, if they are in a taxable position.
What you should know for your provisional income tax declaration:
Income tax is assessed on a current year basis. For the calendar year 2015 a company is obliged to estimate its corporate tax for the year and file the provisional tax declaration by 31 July 2015. The estimated corporate tax payable is due for payment in two equal instalments: by 31 July 2015 and by 31 December 2015.
Revision of provisional income tax declaration
Following the submission of the provisional tax declaration, a Company may submit a revised declaration at any time until 31 December 2015. However, a revised provisional tax declaration may NOT result in a refund of the provisional tax already paid, until the final tax computations are filed and agreed upon with the Cyprus tax authorities.
Estimated taxable profits can be revised either upwards or downwards any time before 31st December, the date of the last provisional payment is due. A revision of the taxable profit upwards however will bear interest of 4,5% on completed months per year on the difference between the revised amount of the taxable profits and the amount paid on first instalment. A revision of the taxable profit downwards however cannot exceed the amount of provisional tax paid on the first instalment.
Interest and penalties
- Interest on overdue tax is payable at 4.0% (4,5% prior to January 1, 2015, 4,75% prior to January 1, 2014, 5% prior to January 1, 2013, 5,35% prior to January 1, 2011, 8% prior to January 1, 2010 and 9% prior to January 1, 2007) per annum for every completed month, plus
- A 5% monetary charge is imposed on tax due in case of (a) late submission of the annual tax returns, or (b) failure to settle the tax due, within a period of 30 days from the prescribed filling date
- A 10% penalty is imposed on the final net tax payable if the provisional taxable income is less than 75% of the final income as determined by the audited financial statements
- Following the new tax amendments published in the gazette on 31/12/2010, further penalties may apply in relation to non-compliance (€100 - €200 and an additional penalty of 5% on the tax due)
Please provide your tax advisor with an estimate of your taxable income for the year 2015. Your tax advisor with the assistance of your accountant will then prepare the provisional tax declaration and let you know of the amount due for the first instalment.