According to the Cyprus Income Tax Law, all Cypriot tax resident companies that expect to have taxable income for the running year, must proceed with the submission and payment of the provisional tax in two equal installments before, or on, the following dates:
31/07/20XX: Submission of return and payment of 1st installment
31/12/20XX: Payment of 2nd installment – last day of revision of provisional tax (if needed)
Calculation of Provisional Tax in Cyprus:
The provisional tax is calculated on the profits that are expected to arise in the current year for companies and self-employed persons. Bear in mind that corporate tax rate is 12.5%.
Penalty fee:
Late submission of the return and late payment of instalments are liable to a penalty of 5% plus interest of 2.25% on the payable amount.
Legal entities and self-employed who expect to have profits in the current year and do not pay provisional tax will be liable to 10% additional tax on the tax payable for the year. Same applies for provisional tax payments that will not cover at least the 75% of the final profit for the current year.
We, therefore suggest and advise you to estimate your company’s taxable profits for the year and the relevant tax thereon and inform us as soon as possible of your expectations so that TOTALPRO SERVICES LTD consultants can advise you with the calculation of the expected taxable income and provide you with the steps to be taken for the payment of the taxes.
You should also remit to our office the sum of money for the payment of the first instalment of tax (if any) the latest by 26th of July and for the second instalment of tax by 15th of December (due to Christmas Holidays), to be able to complete and submit the return and pay the relevant amount on time.
We remain at your disposal for any further information needed, by contacting us.