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Alerts on tax law amendments and other tax related matters are issued periodically to keep you up-to-date with the latest local tax developments.

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Cyprus – Netherlands tax treaty signed and published

10 June 2021

On 1 June 2021, Cyprus signed a tax treaty for the avoidance of double taxation (the “treaty”) with the Netherlands, which was published in the Official Gazette on 4 June 2021, the date of ratification by Cyprus.

The treaty will enter into force after the necessary legal procedures are completed. Once it enters into force, the treaty will have effect in both contracting states on or after 1 January following the date the treaty enters into force.

Download the full alert for further details.

Extension of the period for non-imposition of administrative fines for overdue submission of DAC6 information

7 June 2021

Further to our previous alert on the non-imposition of administrative fines for overdue submission of DAC6 information until 30 June 2021, the Tax Department (TD) has announced that this period is extended to 30 September 2021, in the following cases:

  • Reportable cross-border arrangements (RCBAs) that were implemented between 25 June 2018 and 30 June 2020 and had to be submitted by 28 February 2021;
  • RCBAs held between 1 July 2020 and 31 December 2020 and had to be submitted by 31 January 2021;
  • RCBAs held between 1 January 2021 and 31 Αugust 2021, that had to be submitted within 30 days from the date they were made available for implementation or were ready for implementation or the first step in the implementation was made, whichever occurred first;
  • RCBAs for which secondary intermediaries provided aid, assistance or advice, between 1 January 2021 and 31 August 2021 and had to submit information within 30 days beginning on the day after they provided aid, assistance or advice.

Download the full alert for further details.

Clarifications with respect to the tax treatment of the impact on the Financial Statements from the application of IFRS 9, IFRS 15 and IFRS 16

28 May 2021

On 17 May 2021 the Tax Department issued Implementing Guideline 15/2021, providing clarifications with respect to the tax treatment of the impact on the financial statements from the application of IFRS 9, IFRS 15 and IFRS 16 for both Income Tax (IT) purposes and the calculation of Special Defence Contribution (SDC) on Deemed Dividend Distribution (DDD).

Download the full alert for further details.

Relief from interest and penalties on overdue taxes for tax years 2016 - 2019

07 May 2021

We would like to inform you that an amending law was published in the Government Gazette which extends the provisions of the Law Regulating the Settlement of Overdue Taxes (the Law), offering part relief from interest and penalties. The provisions of the amending law are effective from 29 April 2021, the date of its publication.

Download the full alert for further details.

Submission deadline extension for the 2020 tax returns due to the prolonged COVID-19 crisis

21 April 2021

We would like to inform you that in accordance with an amending Assessment and Collection of Taxes law published on 20 April 2021, due to the prolonged crisis and the adverse economic conditions caused by COVID-19, the following deadlines are extended to 30 September 2021:

  • Electronic submission of the 2020 personal income tax return (TD1A) of individuals and payment of the final tax due as per the relevant income tax return;
  • Electronic submission of the 2020 employer’s tax return (TD7); 
  • Payment of the second instalment for the 2020 provisional tax.

Extension of tax incentives for reduced rent 

26 March 2021

We would like to inform you that the tax incentives, provided to landlords for voluntarily reducing the rent charged to tenants - businesses, whose operations have been suspended due to COVID-19 pandemic - (Issue 11/2020),  have been extended for tax year 2021.

The amendments relate to the Income Tax Law and the Special Defence Contribution Law. The amending laws clarify that the tax incentives apply only to the rental of immovable property to businesses whose operations have been suspended and are specifically included in the Infectious Diseases (Determination of Measures to Prevent the Spread of COVID-19 Coronavirus)
Decree (No. 2) of 2021.

Download the full alert for further details.

Cyprus transposes DAC6 into domestic legislation

23 March 2021

On 18 March 2021 the Cyprus Parliament voted into law the provisions of the EU Council Directive 2018/822 (“the Directive”), known as “DAC6”. The amending Law on Administrative Cooperation in the field of taxation is expected to be published in the Official Gazette in the coming days.

The Directive is intended to increase transparency in the area of direct taxation, with a view of combating tax avoidance and tax evasion in the EU. On that account, the obligation to report potential aggressive tax planning aims to balance the asymmetry of information between Tax Authorities and taxpayers, thus enabling EU Member States to prevent harmful tax practices and close any loopholes.

Download the full alert for further details.

Commencement of Ultimate Beneficial Owners (UBOs) Register of Companies and Other Legal Entities in Cyprus

18 March 2021

With reference to our previous alerts (Issues 01/2021 and 02/2021), we would like to inform you that on 12 March 2021, the Registrar of Companies (RoC) announced that the electronic service for the registration of beneficial owner particulars for companies and other legal entities is available as from 16 March 2021 under the section “e-filing services” of the Companies section in the RoC website.

Download the full alert for further details.

Submission deadline extension for the 2019 corporate income tax return and the 2019 income tax return filed by individuals preparing audited FS

16 March 2021

We would like to inform you that in accordance with a Decree issued on 12 March 2021, the following deadlines are extended to 30 September 2021:

  • Electronic submission of the 2019 corporate income tax return (TD4), and
  • Electronic submission of the 2019 personal income tax return (TD1A) of individuals preparing audited financial statements (FS).

Imposition of a 0,4% contribution on Cyprus immovable property disposals

8 March 2021

On 22 February 2021, a law was published in the Official Gazette amending the provisions of the Central Agency for Equal Distribution of Burdens (Creation, Objects, Responsibilities, and Other Related Matters) Law.

According to the amendment, a contribution of 0,4% is imposed on the sale of immovable property in the Republic. The proceeds will go toward supporting refugees and owners of inaccessible immovable property, in an attempt to compensate for the inability to possess or use the land in the occupied north.

Download the full alert for further details.

No imposition of administrative fines for overdue submission of DAC6 information submitted until 30 June 2021

26 February 2021

Further to our previous alert on the extension of the DAC6 reporting deadlines, the Tax Department has announced that there will be no imposition of administrative fines for overdue submission of DAC6 information that will be submitted until 30 June 2021.

Download the full alert for further details.

Brexit - Appointment of a VAT Fiscal Representative in Cyprus

25 February 2021

On 15 February 2021, the Cyprus Tax Authorities (CTA) issued a new Implementing Guideline (IG 10/2021) to clarify that there is no obligation for taxable persons who carry out or will carry out taxable transactions in Cyprus and are based in the United Kingdom, to appoint a VAT fiscal representative or provide a bank guarantee to the CTA.

Download the full alert for further details.

The alert is also available in Greek.

Time of supply for barter transactions in the construction industry

23 February 2021

On 17 February 2021, the Cyprus Tax Department issued a new Implementing Guideline (IG 11/2021) to clarify the time of supply for VAT purposes for barter transactions in the construction industry and, therefore, the time when VAT should be accounted.

Download the full alert for further details.

The alert is also available in Greek.

Changes to VAT deadlines for the payment of VAT due

10 February 2021

On 9 February 2021, an amendment to the VAT Law was published in the Official Gazette allowing for the VAT that is due for the VAT returns ending 31/12/2020 and 31/1/2021 to be settled in three (3) equal monthly instalments without the imposition of additional tax and interest.

The instalment option is available provided the taxpayers submit their VAT returns on time.

The VAT liability on these returns may be settled in three equal monthly instalments payable by 10th of April, 10th of May or 10th of June 2021.

Download the full alert for further details.

The alert is also available in Greek.

Extension of the tax relaxations for the application of tax residency and permanent establishment (PE) during the COVID-19 crisis

09 February 2021

On 25 January 2021, the Tax Department issued Implementing Guideline 7/2021, which extends the provisions of Implementing Guideline 4/2020 for the year 2021 (analysed in our previous alert), for the period that the COVID-19 related restrictions continue to apply globally.

Download the full alert for further details.

Upcoming deadline for submission of revised tax returns for tax years up to and including 2015

05 February 2021

Further to our previous alert, covering the latest amendments introduced in the Assessment and Collection of Taxes law (ACTL), we would like to remind you of the following upcoming deadline for submitting revised tax returns for tax years up to and including tax year 2015: 20 February 2021. 

Download the full alert for further details.

New online portal “SISnet” for payment of social insurance contributions launched

04 February 2021

We would like to inform you that on 15 January 2021 the new online portal "SISnet" for social insurance contributions was implemented, the use of which is mandatory as of 25 January 2021. As of this date, manual payments of contributions to the District Offices will not be accepted.

Download the full alert for further details.

Extension of DAC6 reporting deadlines

03 February 2021

On 3 February 2021, the Cyprus Tax Department announced that the EU Council Directive 2018/822, commonly known as DAC6, is expected to be transposed into domestic legislation within the current month. In this regard, together with the fact that some of the deadlines for the submission of information set out in the Directive have expired, an extension has been provided until 31 March 2021.

Download the full alert for the cases where the extension applies.

Εxtension of the deadline for payment of SDC and GHS contributions on deemed dividend distribution for tax year 2018

28 January 2021

Further to our previous alert on deemed dividend distribution (DDD), we would like to inform you that the deadline for the payment of SDC and GHS contributions on such distributions for the tax year 2018 is extended to 30 April 2021 (from 31 January 2021).

This means that, unless a company has distributed at least 70% of its after tax profits (as adjusted for DDD purposes) until 31/12/2020, the DDD provisions will apply and a liability for SDC and GHS contributions will arise.

It should be noted that no extension is given on the settlement of SDC and GHS contributions arising on actual dividend distributions. SDC and GHS contributions on actual dividends would need to be paid by the end of the following month that the dividend was declared (i.e. 31 January 2021 for dividends declared in December 2020).

It is reminded that prompt payments (Tax codes for DDD: 623 for SDC and 723 for GHS) can be made via JCC smart or online banking while late payments can only be made via online banking.

Indirect Tax News

19 January 2021

Imposition of zero VAT rate on goods related to COVID-19 and the reinstatement of the 9% VAT rate in relation to the provision of accommodation in the hotel sector, restaurant and catering services and passenger transportation.

Download the full alert for details.

The information is also available in Greek.

Postponement of the commencement date for the collection of data of the Ultimate Beneficial Owners (UBOs)

19 January 2021

With reference to our previous alert dated 7 January 2021, we would like to inform you that the Registrar of Companies (RoC) has recently announced that the commencement date for the collection of data of the UBOs of Companies and other legal entities in Cyprus, is postponed to 22 February 2021.

We will revert in due course once more information is available from the Department of RoC and the relevant link for submitting the respective information is available.

Implementation of the Ultimate Beneficial Owner (UBO) Register of Companies and Other Legal Entities in Cyprus

07 January 2021

Cyprus has recently proceeded with the full transposition of the 4th European Directive (EU 2015/849) of the European Parliament (4th AML Directive) into domestic law and activated the implementation of the Ultimate Beneficial Owner (UBO) Register of Companies and other legal entities in Cyprus. The Department of the Registrar of Companies announced that the relevant data collection for companies, will begin on Monday 18 January 2021 and from this date all companies will be granted a period of six (6) months (until 19 July 2021) for registration of the information about their UBOs.

Download the full alert for more details.

The information is also available in Greek.

Deemed Dividend Distribution as at 31 December 2020

22 December 2020

We would like to remind you of the obligations that arise from the deemed dividend distribution (DDD) provisions of the Special Contribution for the Defence Law that apply on 31 December 2020.

Download the full alert to discover more about your obligations.

Extension of the income tax exemption of 20% or €8,550 (whichever is the lower) for employment in Cyprus [Article 8(21)]

16 December 2020

On 15 December 2020, an amending law was published in the Gazette with respect to Article 8(21) of the Income Tax Legislation. The purpose of the amendment is to expand the existing framework of attracting employees from abroad. 

Download the full alert to discover more.

Extension of submission deadline for Country-by-Country Reporting obligations

15 December 2020

On 15 December 2020 the Cyprus Tax Department announced that deadlines are extended with respect to CbCR filing obligations in Cyprus for MNE Groups with 31 December year-ends.

Download the full alert for details.

Reminder for Provisional tax for 2020

11 December 2020

We would like to remind you that 31 December 2020 is the submission deadline for a revised (where needed) provisional tax calculation for 2020 and the payment deadline for the second provisional tax instalment for 2020.

Download the full alert for more details on payment obligations.

Extended deadline for the submission of 2019 personal income tax returns and for the payment of tax

30 November 2020

We would like to inform you that in accordance with a Decree issued on 27 November 2020, the following deadlines are extended to 15 December 2020:

  • Electronic submission of the 2019 personal income tax return by employees and pensioners (TD1 - Employee).
  • Electronic submission of the 2019 personal income tax return by self-employed individuals (TD1 – Self-employed).

Download the full alert to discover more.

Professional License Fee to be imposed on legal entities by Cyprus Municipalities as from 2021

19 November 2020

On 13 October 2020 the Executive Committee of the Union of Cyprus Municipalities decided on the adoption of a uniform policy for the imposition of the annual professional license fee to legal entities who carry on any business, trade or profession within each municipality’s limits.

The power to impose an annual professional license fee to each legal entity that carries on any business, trade or profession within a municipality’s limits is given by articles 104-109 of the Municipalities Law No.111/1985.

Download the full alert to discover more.

The alert is also available in Greek.

New Taxisnet Declarations of withheld Special Defence Contribution (SDC) from Interest and Dividends

18 November 2020

We would like to inform you that there has been a change with
respect to the declarations of withheld Special Defence Contribution and
contributions to the General Healthcare System.

Download the full alert to discover more.

Application of tax residency and permanent establishment (PE) during the COVID-19 crisis

06 November 2020

On 27 October 2020, the Cyprus Tax Department (CTD) issued an
Implementing Guideline 4/2020 (“Εφαρμοστική Οδηγία”) (IG 4/2020) to clarify the application of Article 2 of the Income Tax Legislation (ITL) relating to tax residency and permanent establishment (PE).  

The guidance issued by the CTD follows a similar non-binding guidance issued by the Organisation for Economic Co-operation and Development (OECD), OECD’s Guidance.

Download the full alert to discover more.

Option for the settlement of VAT in instalments without the imposition of additional tax and interest

04 November 2020

On 2 November 2020, an amendment to the VAT Law was published in the Official Gazette allowing for the VAT that is due on 10 November 2020 to be settled in six equal monthly instalments without the imposition of additional tax and interest.

Download the full alert to discover more.

The alert is also available in Greek.

Extended deadline for the submission of 2019 personal income tax returns and for the payment of tax

20 October 2020

We would like to inform you that in accordance with a Decree issued on 20 October 2020, the deadlines for the submission of 2019 personal income tax returns and for the payment of tax, are extended to 30 November 2020.

Download the full alert to discover more.

Reminder of the upcoming submission deadlines for CbC Reporting obligations

11 September 2020

We would like to remind you that the 31st of December 2020 is the submission deadline for the Country-by-Country (“CbC”) Reporting obligations in Cyprus.

Download the full alert to discover which the CbC reporting obligations are, to whom they apply, the mechanism to submit and the relevant penalties of non-compliance.

Amendments to the Assessment and Collection of Taxes Law

4 September 2020

On 20 August 2020, a law amending the Assessment and Collection of Taxes Law was published in the Gazette. The amending law introduces provisions which among others aim to improve tax compliance and offer additional powers to the Commissioner of Taxation with regards to tax collection. 

Following its publication, on 28 August, the Tax Department issued a clarifying Circular (Circular 46) with regards to the practical application of the law. 

Download the full alert for more information.

Various amendments to the VAT law

27 August 2020

An amendment published in Cyprus’ official Gazette on 20 August 2020 makes the following main changes to the Cyprus VAT law:

  1. New definition of legal person
  2. Application of Article 11B     
  3. Introduction of Article 11E
  4. VAT refunds
  5. Penalties
  6. Deadline for lodging objection
  7. Registration/de-registration of non-Cyprus established persons 
  8. Definition of "renovation"
  9. Imposition of zero rate for international transport

Download the full alert to find out more information about each update.

The alert is also available in Greek.

Agreement reached to amend the Cyprus-Russia Double Tax Treaty (DTT)

13 August 2020

On 10 August 2020, Cyprus and Russia concluded the negotiations of a new protocol to amend the existing provisions of the Cyprus-Russia tax treaty. The agreement reached between the two countries puts an end to the uncertainty triggered that Russia would denounce the Cyprus-Russia tax treaty.

The intention of both countries is for the revised WHT rates to be effective from 1 January 2021, through the signature of a protocol amending the existing tax
treaty over the next months.

Download the full alert for the amendments on the existing provisions and concluding remarks.

Amendments to the tax treatment of intangible assets

06 August 2020

On 17 July 2020, an amending Income Tax Law (ITL) was voted by Parliament with respect to the tax treatment of intangible assets.

The amendment aims to simplify the relevant legislation and provide increased flexibility to taxpayers benefiting from these provisions.

Download the full alert for more details.

Upcoming deadline for the payment of SDC and GHS contributions on interest and dividend income received from abroad

24 July 2020

We would like to remind you of the upcoming deadline for the payment of Special Defence Contributions (SDC) and contributions to the General Healthcare System (GHSC) on dividend and interest income received from abroad during the first six months of 2020. The effective payment deadline for individuals and companies is 31 July 2020.

Download the full alert for more details.

Payment of remaining income tax due for tax year 2019 for companies and self-employed individuals preparing audited financial statements

23 July 2020

We would like to remind you that the 1st of August 2020 is the statutory deadline for the payment of any remaining income tax due for the year 2019 for companies and self-employed individuals preparing audited financial statements.

Download the full alert for more details about the payment method as well as the interest and penalties that may apply.

Amendments to the Law Regulating the Settlement of Overdue Taxes

20 July 2020

Further to our latest alert relating to the Law Regulating the Settlement of Overdue Taxes (02/2020), we would like to inform you that on 17 July 2020 a law was published in the Government Gazette which provides the following amendments to the Law:

Deadline for the submission of applications for the settlement of overdue taxes

Download the full alert for further details.

Cyprus Indirect Tax News

15 July 2020

On 3 July 2020, the Cyprus government published in the official gazette an amendment to VAT law harmonizing Cypriot VAT law with the “quick fixes” provisions contained in EU Directive 2018/1910. The amendments are effective as from 1 January 2020.

The amendments, described in the alert, apply to the cross-border supply of goods within the EU and include provisions for call-off stock arrangements, chain transactions, and intra-EU supplies.

Download the full alert for further details.

The alert is also available in Greek.

Cyprus completes adoption of ATAD provisions

03 July 2020

Following the partial adoption of the EU Anti-Tax Avoidance Directive of 12 July 2016 (ATAD I) in 2019, on 19 June 2020 the Cyprus Parliament voted into law the remaining provisions of ATAD I, as well as the provisions of the EU Anti-Tax Avoidance Directive of 29 May 2017 (ATAD II). The law was published in
the Official Gazette on 3 July 2020.

It is noted that these measures are expected to impact companies and groups of companies with international activities.

Download the alert for an analysis of the provisions voted into law.

Payment of 1st provisional tax instalment for 2020

02 July 2020

Deloitte would like to remind you that the payment deadline for the 1st provisional tax instalment for tax year 2020 is the 31st of July 2020.

Download the alert for more information on the Provisional Tax Payment, including the obligation and payment guidelines.

VAT rate reduced to support tourism industry

24 June 2020

On 23 June 2020, the Cyprus Council of Ministers issued a new decree, according to which the reduced VAT rate of 9% will be decreased to 5% for specific services provided within the Republic of Cyprus from 1 July 2020 to 10 January 2021.

Download the full alert for further details.

The alert is also available in Greek.

Amendments to the Notional Interest Deduction (NID) provisions of the Income Tax Law

16 June 2020

On 16 June 2020, an amending Income Tax Law (ITL) was published in the Official Gazette with respect to the Notional Interest Deduction (NID).

The revised NID provisions enhance the tax benefits for Cyprus companies financing their operations through new equity, are in line with the recommendations of the European Commission, and offer additional clarity for taxpayers.

Download the alert for more details.

Extended deadline for the submission of 2019 personal income tax returns and for the payment of tax

05 June 2020

In accordance with a Decree issued on 5 June .2020, the deadlines for the electronic submission of the 2019 personal income tax returns TD1 - Employee and TD1 - Self-emploed, are extended to 30 October 2020.

Download the alert for more details.

Income Tax Law amendment provides tax incentives for reduced rent 

04 June 2020

On 2 June 2020, an amending Income Tax Law was published in the Official Gazette with respect to tax relief on rental income. The amendment was voted to support the Cyprus economy following the COVID-19 outbreak and provides a tax incentive to landlords (individuals or companies) so as to voluntarily reduce the rent charged to tenants.

Download the alert for more details.

Extended deadline for the submission of 2018 tax returns

25 May 2020

In accordance with a Decree issued on 22 May 2020, the submission deadline for the 2018 corporate income tax return (TD4) and the 2018 personal income tax return of individuals preparing audited financial statements (TD1α) is further extended to 30 June 2020.

Amendments to the Merchant Shipping (Fees and Taxing Provisions) Law of 2010

21 April 2020

Following the approval of the European Commission (DG Comp) for the renewal of the special mode of taxation of maritime activities, known as tonnage tax, the House of Representatives voted on 15 April 2020 amendments to the Merchant Shipping (Fees and Taxing Provisions), as those were agreed with the European Commission, which were published in the Official Gazette of the Republic on 16 April 2020.

Download the full alert for a summary of the amendments.

The alert is also available in Greek.

Changes to VAT periods and deadlines for submission of returns and payment of VAT due

17 April 2020

In response to COVID-19, the Cyprus Council of Ministers issued a decree on 16 April 2020 that changes:

  • the VAT reporting periods for taxpayers through 30 June 2020, 
  • the deadlines for submitting the VAT returns for these periods, and 
  • the deadlines for payment of the VAT due. 

The decree affects only businesses that have received an email message from the Tax Department informing them of the changes to their compliance obligations (at the e-mail address as registered in the TAXISnet system).

Download the full alert for details and useful examples.

The alert is also available in Greek.

Relief from import duties and VAT exemption on imports of goods needed to combat COVID-19

16 April 2020

On 9 April 2020, the Cyprus Customs Authorities issued Circular EE – «Μ» (67) relating to the European Commission’s decision authorizing EU Member States to provide relief from import duties and a VAT exemption on imports of goods needed to combat the effects of COVID-19. The goods that fall under this relief/exemption are medical equipment, supplies, and consumables imported into Cyprus between 30 January 2020 and 31 July 2020.

Download the full alert for the list of said products and eligibility requirements.

The alert is also available in Greek.

Tax and VAT measures voted following the Coronavirus outbreak

30 March 2020

Following our alert on the preliminary tax and VAT measures announced by the Cyprus Government following the Coronavirus outbreak (Issue 05/2020 dated 16/03/2020), the Cyprus Parliament proceeded with the voting of the relevant tax and VAT laws on 27 March 2020.

Download the full alert for measures relating to:

  • General Healthcare System (GHS) Law: Decreased GHS contributions for April, May and June 2020
  • Law Regulating the Settlement of Overdue SocialContributions: Deferral of payments that are due forthe months of March and April 2020
  • VAT Law: Temporary deferral of VAT payable

How can we help? We are at your disposal to discuss the above and advise youof the potential impact on your activities.

Cyprus Business Process Solutions News: Measures announced by the Department of Registrar of Companies and Official Receiver in response to COVID-19

27 March 2020

In the context of the measures taken by the government to support companies / businesses affected by the restrictive measures imposed to limit the spread of COVID-19 (Coronavirus), the Department of Registrar of Companies and Official Receiver issued an announcement on 23 March 2020.

Download the full alert for specific measures.

How can we help? We are at your disposal to discuss these developments with you and how these affect your business.

Further clarifications regarding the Tax and VAT  measures announced by the Cyprus Government following the Coronavirus outbreak

18 March 2020

Following our communication with the Health Insurance Organisation and the Ministry of Finance, we understand that the intention of the Cyprus Government is for the reduced contributions to the GHS to apply for the months of April and May 2020 and this will be applicable for all contributors.

Effectively, the increased contribution rates to the GHS will apply as planned for the whole of March 2020.

Download the full alert for a table specifying the period of application of the
relevant contribution rates to the GHS per contributor’s category. 

Tax and VAT measures announced by the Cyprus Government following the Coronavirus outbreak 

16 March 2020

The recent outbreak of COVID-19, is proving to be an unprecedented challenge for humanity. Having been declared a global pandemic by the World Health Organization, the virus is already impacting our day to day lives as well as our businesses. In light of the business disruption caused by the Coronavirus, the Cyprus Government announced a number of measures in order to support the country’s economy. Download the full alert for further details.

As we appreciate that clarifications may be required for the correct implementation of the above measures, we are in direct contact with the Ministry of Finance and we will aim to revert with further guidance as soon as possible.

Refund on GHS Contributions 

12 March 2020

On 7 February 2020, the Health Insurance Organization (“HIO”), in exercising the powers conferred to it by the General Health System Legislation (“The Law”), issued instructions in relation to refunds on GHS Contributions.

These instructions lay down the procedure for requesting a refund on GHS contributions paid in excess of the maximum amount on which GHS contributions apply.

How are you affected?

Contributors who have paid GHS contributions on total amounts of income in excess of €180.000 per annum have the right to a refund and can exercise their right by submitting the relevant application form to the HIO.

Increase of contributions towards the General Healthcare System (GHS)

27 February 2020

Following the first phase of the newly introduced healthcare system in Cyprus, which came into force on 1 March 2019, we would like to inform you that as from 1 March 2020 the contribution rates to the GHS will increase.

Download the full alert which includes a table with the increases in contribution rates per category and the income limit.

Amendments to the Law regulating the settlement of overdue taxes

24 February 2020

Following our tax  alert in July 2018 (edition 10/2018), relating to the Law Regulating the Settlement of Overdue Taxes, we would like to inform you that on 14 February 2020 a law was published in the Government Gazette which provides amendments to the Law.

Download the full alert for a description of the amendments and how these may affect you.

VAT refund on the purchase of a plot by a private individual

31 December 2019

The Cyprus tax authorities announced on 24 September 2019 that
individuals who had purchased undeveloped building land on or after 2 January
2018 for the sole purpose of constructing a dwelling to be used as their
principal and permanent place of residence would be entitled to a partial
refund of the VAT paid.  

How you  may be affected by the above decision: Individuals who purchase separately the plot of land to be used for the construction of their principal and permanent residence have the right to a partial refund of the VAT paid (14% of the value of the plot).

The alert is also available in Greek.

Increase of the limit for certain allowances for individuals from one-sixth (1/6) to one-fifth (1/5) 

20 December 2019

On 19 December 2019, an amending Income Tax Law (ITL)
was published in the Official Gazette, providing for an increase to the annual
limit for certain allowances which are deductible from an individual’s taxable
income.

Deemed Dividend Distribution as at 31 December 2019

19 December 2019

We would like to remind you of the deemed dividend
distribution (DDD) provisions of the Special Contribution for the Defence Law
that apply on 31 December 2019.

  • What profits are within the scope of the DDD provisions?
  • When do the DDD provisions apply?
  • What are the penalties for late payment of the SDC and GHS due?

2019 Provisional Tax – Reminder 

06 December 2019

We would like to remind you of the following upcoming deadlines:

  • 31 December 2019: Submission of a revised provisional tax return for 2019
  • 31 January 2020: Payment of 2nd provisional tax instalment for 2019

Cyprus Administration Court Judgement relating to catering services

12 November 2019

On  10 September 2019 the Administration Court in Cyprus issued its judgement in relation to a case involving a business which was operating as a pub/restaurant with an in-house kitchen offering food until 11pm.

How you are affected by the above judgement: Businesses engaged in the catering business should examine their VAT treatment applied based on the above Court Judgement.

The alert is also available in Greek.

New tax treaty signed with Egypt

29 October 2019

On 8 October 2019, Cyprus signed a new tax treaty with Egypt, a neighboring  country with a growing economy. The treaty was published in the Gazette on 25 October 2019 and once effective, it is going to replace the existing tax treaty between the two countries that has been in effect since 1996.

New administrative penalties for late filings to the Registrar of Companies

22 October 2019

Following recent amendments to the Cyprus Companies Law, Cap. 113 (“the Law”), the Registrar of Companies will impose administrative penalties on certain filings submitted after the prescribed timeframes as provided by the Law. The imposition of the administrative penalties will be effective from 18 December 2019.

Transfer Pricing requirements introduced on the 2018 Tax Return

04 October 2019

We would like to inform you that the Cyprus Tax Authorities (CTA) have recently published the 2018 Corporate Income Tax Return (TD4) which you can find here for your reference. The 2018 TD4 includes two new important requirements in Part 3, relating to transfer pricing as shown below.

Deloitte Tax Resources

12 September 2019

We are pleased to share with you a number of Deloitte tax resources available to help you stay up-to-date with the latest local and international tax developments.

All resources are easily accessible from any device.
 

Reminder of the upcoming submission deadlines for CbC Reporting obligations

11 September 2019

We would like to remind you that 31st December 2019 is the submission deadline for the following Country-by-Country (“CbC”) Reporting obligations in Cyprus:

  • Submission of CbC Reports for the 2018 Reporting Fiscal Year (in respect of MNE groups which have a year end of 31 December 2018)1.
  • Submission of CbC Notifications for the 2019 Reporting Fiscal Year (in respect of MNE groups which have a year end of 31 December 2019)1.

Payment of final tax for the year 2018 for companies and self-employed individuals preparing audited financial statements

11 July 2019

We would like to remind you that the 1st of August 2019 is the deadline for the payment of the final tax for the year 2018 for companies and self-employed individuals preparing audited financial statements.

In case the tax balance is not paid by the end of the month of the deadline date (i.e. by 31 August 2019) a 5% penalty applies on the tax due. In addition, the tax balance will be subject to interest at the rate in force (currently at 2% per annum) until the settlement of the tax. Finally, if the tax balance is not settled within two months after the deadline date, an additional 5% penalty may be imposed.

Reduction of SDC rate applicable on interest income received by Cyprus tax resident domiciled individuals from corporate bonds

08 July 2019

On 26 June 2019 an amendment to the Special Defence Contribution (SDC) Law was published in the Official Government Gazette.

According to the amendment, effective from 26 June 2019, the SDC rate applicable on interest income received by Cyprus tax resident domiciled individuals from corporate bonds is reduced from 30% to 3%. The reduced rate is now in line with the SDC rate applicable on interest earned from Government bonds.
 

Payment of 1st provisional tax instalment for tax year 2019

05 July 2019

We would like to remind you that the deadline for the payment of the first provisional tax instalment for tax year 2019 is the 31st of July 2019.

Provisional tax payment obligation

The following persons should consider whether a provisional tax payment would arise based on their expected annual taxable income:

  •  Individuals with taxable income other than salaries, pensions, dividends and interest, and
  •  Companies with taxable income.

Cyprus – Kazakhstan tax treaty signed and published

28 May 2019

On 15 May 2019, Cyprus signed a tax treaty with Kazakhstan which was published in the Gazette on 24 May 2019.

This is an important development as Kazakhstan is the 9th largest country in the world, the largest of the former Soviet republics (excluding Russia) and a growing economy.

Amendments to the Income Tax Law for the adoption of rules against tax avoidance practices

09 April 2019

Also available in Greek

On 5 April 2019, the House of Representatives voted into law the provisions of the European Council Directive for the adoption of rules against tax avoidance practices that directly affect the functioning of the internal market (known as Anti-Tax Avoidance Directive – ATAD).

The Directive stems from the action plan against Base Erosion and Profit Shifting (BEPS), which is the result of the initiative of the G20 and the member countries of the Organization for Economic Co-operation and Development (OECD) to combat tax evasion through the transfer of profits to countries with preferential tax regimes.

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Records and supporting documentation that should be kept by employers in relation to Benefits in Kind

28 March 2019

Also available in Greek.

Tax Treatment of the Benefits in Kind (BIK)

Further to our previous tax alert dated 11 December 2018, (issue 16/2018), we would like to inform you that the Tax Department has issued Interpretative Circular 32, which clarifies the forms and supporting documentation that should be kept by the employers for each tax year and be available to be provided to the Tax Department in case requested or in case of an examination.

Links to forms: 

FORM T.D.286 A (English)
FORM T.D.286 F (English)

ΤΦ 286 Α (Greek)
ΤΦ 286 Φ (Greek)

Impact of Brexit on VAT refund claims for business expenses incurred in the UK in 2018

06 March 2019

Our Indirect Tax Alert aims to inform you of the impact that the imminent Brexit will have on the deadline for claiming refund of the VAT on business expenses incurred in the UK during 2018 in accordance with Directive 2008/09/EC (formerly 8th Directive). The Directive enables businesses established and registered for VAT purposes within the EU to request a refund of the VAT incurred on business expenses in other EU member states.

 

Tax and other incentives for the film industry

19 December 2018

On 11 December 2018, an amendment to the Income Tax Law (ITL) was published in the Official Government Gazette, providing tax incentives to companies involved in film productions.

The incentives are offered within the context of implementing a scheme approved by the Council of Ministers on 27 September 2017, aiming to attract film production companies to Cyprus. In addition to the two tax incentives provided in the ITL, the scheme provides for other (non-tax) incentives as well.

Extension of submission deadline for CbC Reports

19 December 2018

We would like to inform you that on 18 December 2018 the Cyprus Tax Department has announced that the submission deadline for Country-by-Country (“CbC”) Reports for the 2017 Reporting Fiscal Year has been extended from 31 December 2018 to 31 January 2019. The relevant announcement can be found at the Tax Department’s website.

Provisional tax for 2018 - Reminder

We would like to remind you of the upcoming deadline for the payment of the second instalment and the option to submit a revised provisional tax return for 2018.

As mentioned in our previous tax alert, the following persons have an obligation to submit a provisional tax return:

  • Individuals with taxable income other than salaries, pensions, dividends and interest (ΤD5)
  • Companies with taxable income (ΤD6)

Tax treatment of Benefits in Kind

11 December 2018

Also available in Greek.

The Tax Department has recently published an Informative Guide, in the Greek language, which explains the tax treatment of certain benefits offered by employers to employees and persons who hold or are deemed to hold an office. It is soon expected that the Informative Guide will also be issued in English in the official website of the Tax Department.

Deemed Dividend Distribution for 2018

20 November 2018

Also available in Greek

We would like to remind you of the deemed dividend distribution (DDD) provisions of the Special Contribution for the Defence Law that apply on 31 December 2018.

Tax treatment of Benefits in Kind

19 October 2018

Also available in Greek.

The Tax Department has recently published an Informative Guide, in the Greek language, which explains the tax treatment of certain benefits offered by employers to employees and persons who hold or are deemed to hold an office.

 

Reminder of the upcoming submission deadlines for CbC Reporting obligations

21 September 2018

We would like to remind you that 31st December 2018 is the submission deadline for the following Country-by-Country (“CbC”) Reporting obligations in Cyprus:

  • Submission of CbC Reports for the 2017 Reporting Fiscal Year (in respect of MNE groups which have a year end of 31 December 2017).
  • Submission of CbC Notifications for the 2018 Reporting Fiscal Year (in respect of MNE groups which have a year end of 31 December 2018).

Φορολογικές τροποποιήσεις σχετικά με τις αναδιαρθρώσεις δανείων

3 August 2018

Θα θέλαμε να σας πληροφορήσουμε ότι η Βουλή των Αντιπροσώπων ψήφισε σειρά τροποποιήσεων στους ακόλουθους νόμους:

  • Περί Φορολογίας του Εισοδήματος Νόμος
  • Περί Φορολογίας Κεφαλαιουχικών Κερδών Νόμος
  • Περί Έκτακτης Εισφοράς για την Άμυνα Νόμος
  • Περί Χαρτοσήμων Νόμος
  • Περί Κτηματολογικού και Χωρομετρικού Τμήματος Νόμος

Submission of provisional tax return for 2018

5 July 2018

Also available in Greek.

Deloitte would like to remind you that the submission deadline for the provisional tax return for 2018 is the 31st of July 2018.

Obligation to submit a provisional tax return

The following persons have an obligation to submit a provisional tax return:

  • Individuals with taxable income other than salaries, pensions, dividends and interest (ΤD5)
  • Companies with taxable income (ΤD6)

Extension to the Law Regulating the Settlement of Overdue Taxes  

4 July 2018

Also available in Greek.

On 29 June 2018, the Parliament voted for an amendment to the Law Regulating the Settlement of Overdue Taxes.

The amendment provides for a six month extension to the deadline for the submission of applications for relief from interest and penalties on overdue taxes, for tax years up to and including 2015.
 

Transfer Pricing requirements introduced on the 2018 Tax Return

04 October 2019

We would like to inform you that the Cyprus Tax Authorities (CTA) have recently published the 2018 Corporate Income Tax Return (TD4) which you can find here for your reference. The 2018 TD4 includes two new important requirements in Part 3, relating to transfer pricing as shown below.

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