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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.
Cyprus Tax News
Additional FAQs issued by the Cyprus Tax Department with respect to the Transfer Pricing Documentation rules
29 March 2024
On 28 March 2024, the Cyprus Tax Department (“CTD”) uploaded additional
“Frequently Asked Questions” (“FAQs”) on its website with respect to Transfer
Pricing (“TP”). The FAQs provide further guidance on the TP Documentation rules that were introduced from tax year 2022 onwards.
Download the alert for the most recent questions addressed in the FAQs.
Business Process Solutions News
Abolishment of the annual fee (€350) from the year 2024 onwards - updates
22 March 2024
With reference to our previous alert, we would like to inform you that on 21 March 2024, the Department of the Registrar of Companies and Intellectual Property (the “Registrar”) announced that according to the Companies (Amendment) Law 2024, L.25(I)/2024, which was published in the Official Gazette of the Republic on 15 March 2024, the annual fee for companies registered in the Register of the Registrar of Companies is abolished from 2024 onwards. It is further noted that the obligation to pay the annual fees for the years from 2011 to 2023 continues to apply.
Download the alert for more details.
Business Process Solutions News
Abolishment of the annual fee (€350)
27 February 2024
We would like to inform you that on 21 February 2024, the President of the Republic of Cyprus announced the decision of the Council of Ministers to abolish the annual fee of €350, which has been a mandatory requirement for all companies registered with the Department of Registrar of Companies and Intellectual Property of Cyprus since 2011.
Download the alert for more details.
Deemed Dividend Distribution as at 31 December 2023
05 December 2023
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 2023.
Download the alert for more details.
Reminder for provisional tax for tax year 2023
04 December 2023
We would like to remind you that the 31st of December 2023 is the submission deadline for a revised (where needed) provisional tax calculation for 2023 and the payment deadline for the second provisional tax instalment for 2023.
Download the alert for more details.
Cyprus Business Process Solutions News Implementation of the Final Solution of the electronic system of the Register of Beneficial Owners
21 November 2023
We would like to inform you that the Department of the Registrar of Companies and Intellectual Property (the “Department”) announced that as of 14 November 2023, the Final Solution of the electronic system of the Register of Beneficial Owners (the “BO Register”) will be implemented in three stages.
Download the alert for more details.
Circular issued by the Tax Department for the tax treatment of income generated from accommodation rentals through online platforms
11 November 2023
The Cypriot Tax Department has recently issued Circular 10/2023 (“the Circular”), which clarifies the tax implications for income generated from accommodation rentals through online platforms (such as, Airbnb, Booking.com) and other means.
Download the alert for more details.
Cyprus – Croatia tax treaty signed and published
10 November 2023
On 17 October 2023, Cyprus signed a treaty for the avoidance of double taxation (“the treaty”) with Croatia, which was published in the Official Gazette on 27 October 2023.
Download the alert for more details.
Reminder of the upcoming submission deadlines for CbC Reporting obligations
04 November 2023
We would like to remind you that 31st of December 2023 is the submission deadline for the following Country-by-Country (“CbC”) Reporting obligations in Cyprus:
- Submission of CbC Reports for the 2022 Reporting Fiscal Year (in respect of MNE groups which have a year end of 31 December 20221).
- Submission of CbC Notifications for the 2023 Reporting Fiscal Year (in respect of MNE groups which have a year end of 31 December 20231).
Download the alert for more details.
Antigua and Barbuda, Belize and Seychelles added to EU list of non-cooperative jurisdictions for tax purposes
26 October 2023
Further to our previous alert on the update of the EU list of non-cooperative jurisdictions for tax purposes (“the EU list” or “the list”), we would like to inform you that on 17 October 2023 the EU Council added Antigua and Barbuda, Belize and the Seychelles to the list.
Download the alert for more details.
Circular issued by the Tax Department for the tax treatment of income generated from accommodation rentals through online platforms
20 October 2023
We would like to inform you that on 17 October 2023 the Tax Department announced its ongoing efforts to expedite the processing of personal income tax returns for the years 2017 onwards with the objective of assessing all income tax returns submitted up to year 2022.
Download the alert for more details.
Cyprus Business Process Solutions News Notice for the submission of beneficial ownership data onto the Register of Beneficial Owners and imposition of fines
12 September 2023
The Department of Registrar of Companies and Intellectual Property has announced that the final solution of the electronic system of the Register of Beneficial Owners is expected to be implemented towards the end of October 2023. In this respect all companies incorporated under The Companies Law Cap. 113, European public limited companies (SE), and Partnerships, including their officers/partners, are urged to submit the details and information of their beneficial owners to the existing interim solution system of the Register of Beneficial Owners by 30 September 2023, if not already done so. This will prevent potential fines, penalties, or criminal proceedings for non-compliance.
Download the alert for more details.
Circular issued by the Cyprus Tax Department with respect to Financing Transactions of a “Back-to-Back” Nature
13 July 2023
On 7 July 2023, the Cyprus Tax Department (“CTD”) issued Circular 7/2023, which is effective from the tax year 2023 onwards, clarifying the method which it considers appropriate for determining the arm’s length pricing for financing transactions, including those of a “back-to-back” nature.
Download the alert for more details.
New Transfer Pricing Circular issued by the Cyprus Tax Department with respect to Simplification Measures for Low Value Transactions
10 July 2023
On 6 July 2023, the Cyprus Tax Department (“CTD”) issued a Circular with respect to transactions that fall below the Local File threshold.
The Circular applies to all taxpayers with related party transactions (“Controlled Transactions”) which are exempted from the obligation to be documented in a Cyprus Local File. As a reminder, per the provisions of Article 33 of the Income Tax Law (the "arm’s length principle”), such exemption applies when the aggregate value of Controlled Transactions per particular category (e.g. goods, services, IP related income, financial transactions[1]) total, or should total had the Controlled Transactions been executed based on the arm’s length principle, an amount which does not exceed €750.000 per tax year.
Download the alert for more details.
Amendments to Article 8(23A) of the Income Tax Law - 50% Exemption Update
06 July 2023
With reference to our previous alert (Issue 14/2022), we would like to inform you that on 30 June 2023 an amending law was published in the Gazette with respect to the 50% exemption of the remuneration from employment, as provided in Article 8(23A) of the Income Tax Law.
Download the alert for more details.
Reminder for 1st provisional tax instalment for tax year 2023
27 June 2023
We would like to remind you that the payment deadline for the 1st provisional tax instalment for tax year 2023 is 31 July 2023.
Obligation for provisional tax payment
The following persons have an obligation to pay provisional tax, based on their expected annual taxable income for tax year 2023:
• Individuals with taxable income other than salaries, pensions, dividends and interest; and
• Companies with taxable income. Persons with no taxable income, do not have an obligation to pay provisional tax.
Download the alert for more details.
Extension to the deadline for the submission of 2022 Personal Income Tax returns (TD1s)
12 June 2023
We would like to inform you that a Decree (No.183/2023) was issued on Friday 9 June 2023 in the Official Gazette which extends the deadline for the electronic submission of the 2022 Personal Income Tax returns (TD1s) up to 2 October 2023 as well as for the payment of the final (if any) tax due (self-assessment).
Download the alert for more details.
Extension to the deadline for the submission of 2022 Personal Income Tax returns (TD1s)
12 June 2023
We would like to inform you that a Decree (No.183/2023) was issued on Friday 9 June 2023 in the Official Gazette which extends the deadline for the electronic submission of the 2022 Personal Income Tax returns (TD1s) up to 2 October 2023 as well as for the payment of the final (if any) tax due (self-assessment).
Download the alert for more details.
Overview of the OECD Pillar Two guidance on Safe Harbours and Penalty Relief
10 May 2023
Further to our alert on the agreement of the Organisation for Economic Cooperation and Development (OECD) Inclusive Framework (IF) on the components on Pillar Two, in late December 2022, the IF released an implementation package relating to Pillar Two Global Anti-Base Erosion (GloBe) Rules, which consisted of three elements:
- Guidance on Safe Harbours and Penalty Relief;
- A public consultation document on the GloBe Information Return; and
- A public consultation document on Tax Certainty for the GloBE Rules.
New reporting requirements for Payment Service Providers in accordance with the Central Electronic System of Payment (“CESOP”)
28 March 2023
In an effort to combat e-commerce VAT fraud, the EU Council adopted new legislative measures which amend the EU VAT Directive and come into effect as from 1 January 2024. The intention of the Council is to give the Tax Authorities of the Member States the right instruments to detect possible e-commerce VAT fraud carried out by sellers established in another Member State or in a non-EU country.
Download the alert for more details.
Additional FAQs issued by the Cyprus Tax Department with respect to the Transfer Pricing Documentation rules
14 March 2023
Further to our previous tax alert dated 14 February 2023, the Cyprus Tax Department (CTD) uploaded on 14 March 2023 three additional “Frequently Asked Questions” (FAQs) in its newly introduced section, with respect to transfer pricing.
Download the alert for more details.
British Virgin Islands, Costa Rica, Marshall Islands and Russia added to the EU list of non-cooperative jurisdictions for tax purposes
15 February 2023
Further to our previous alert on the introduction of withholding taxes (WHT) on payments to companies in jurisdictions included in the EU list of non-cooperative jurisdictions for tax purposes, we would like to inform you that on 14 February 2023 the EU Council added the British Virgin Islands, Costa Rica, Marshall Islands and Russia to the list.
Download the alert for more details.
FAQs issued by the Cyprus Tax Department with respect to the Transfer Pricing Documentation rules
14 February 2023
On 10 February 2023, the Cyprus Tax Department (CTD) uploaded a new “Frequently Asked Questions” (FAQs) section on its website with respect to transfer pricing. The FAQs provide some basic guidance on certain aspects of the new Transfer Pricing documentation rules that were introduced last year.
Download the alert for more details.
Tax For All (TFA) Portal is underway
27 January 2023
Taxpayers are advised to proceed immediately with updating their e-mail addresses via the TAXISnet website, as this is a necessary element for the transfer of their account from the TAXISnet system to the new TFA system.
Download the alert for instructions.
Deemed Dividend Distribution as at 31 December 2022
14 December 2022
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 2022.
Download the full alert for more details.
Reminder for provisional tax for tax year 2022
08 December 2022
We would like to remind you that 31 December 2022 is the submission deadline for a revised (where needed) provisional tax calculation for 2022 and the payment deadline for the second provisional tax instalment for 2022.
Download the full alert for more details.
Clarifications for the imposition of the 0,4% contribution on Cyprus immovable property disposals
24 November 2022
Further to our previous alert on the amendment of the Central Agency for Equal Distribution of Burdens (Creation, Objects, Responsibilities, and Other Related Matters) Law, on 18 November 2022 an amending law was published in the Official Gazette which provides clarifications with respect to the collection of the contribution.
As a reminder, a contribution of 0,4% is imposed on the sale of immovable property located in the areas controlled by the Republic and on the sale of shares in a company that owns such immovable property, provided that the buyer takes control of the company.
Download the full alert for the relevant clarifications.
Amendments to the 8th Schedule of the VAT Law
18 November 2022
We would like to inform you that on 11 November 2022, a Decree (K.Δ.Π. 423/2022) was issued in the Official Gazette, amending the 8th Schedule of the VAT law in relation to the supply of Immovable Property.
With the amendment, new criteria are applied to determine whether the supply of a building and the land transferred therewith is considered as a taxable or an exempt supply.
Download the full alert for further details.
Circular issued with clarifications for the application of the income tax exemptions for employment income
7 November 2022
Further to our previous alert on the new income tax exemptions for employment income, on 1 November 2022 a Circular (Νο. 10/2022) was issued by the Tax Department which provides clarifications for the application of these exemptions as well as a number of examples to guide taxpayers with respect to their practical application.
Download the full alert for further details.
Application of reverse charge for unprocessed and semi-processed precious metals
25 October 2022
We would like to inform you that on 7 October 2022, a Decree (No.152(I)/2022) was published in the Official Gazette which provides that purchasers of certain unprocessed and semi-processed precious metals as defined in the Cyprus VAT Law, must account for VAT in Cyprus based on the reverse charge provisions.
Download the full alert for further details.
No obligation for individuals with gross annual income below €19.500 to submit a personal tax return for tax year 2022
27 September 2022
We would like to inform you that on 23 September 2022, a Decree (No. 373/2022) was issued in the Official Gazette which exempts individuals with gross annual income below €19.500, from the obligation to submit a personal income tax return (Form T.D.1) for tax year 2022.
As a reminder, back in 2020 an amending Assessment and Collection of Taxes was published, according to which, from tax year 2020 onwards, all individuals with gross income that falls under the provisions of Article 5 of the Income Tax Law are obliged to submit a personal income tax return, subject to a decree to be issued by the Council of Ministers which may provide for an exemption.
Reminder of the upcoming submission deadlines for CbC Reporting obligations
21 September 2022
We would like to remind you that the 31st of December 2022 is the submission deadline for the following Country-by-Country (“CbC”) Reporting obligations in Cyprus:
- Submission of CbC Reports for the 2021 Reporting Fiscal Year (in respect of MNE groups which have a year end of 31 December 20211).
- Submission of CbC Notifications for the 2022 Reporting Fiscal Year (in respect of MNE groups which have a year end of 31 December 20221).
Download the full alert for further details.
Extension of the deadline for the submission of 2021 Personal Income Tax returns (TD1)
29 July 2022
We would like to inform you that a Decree (No.315/2022) was issued today in the Official Gazette which extends the deadline for the electronic submission of the 2021 Personal Income Tax returns (TD1) up to 31 August 2022 as well as for the payment of the final tax due.
It is noted that the obligation to submit a personal income tax return for tax year 2021 falls on employees, pensioners and self-employed persons without Financial Statements, whose gross total income for the tax year 2021 exceeds the amount of €19,500.
New income tax exemptions for employment income to attract foreign talent
27 July 2022
On 26 July 2022, an amending law was published in the Gazette with respect to the income tax exemptions for employment income, provided in Articles 8(21) and 8(23) of the Income Tax Law.
The amending law was voted in the context of the Government’s strategy to attract and retain foreign talent to Cyprus, as the framework was approved by the Council of Ministers in October 2021.
Download the full alert for further details.
Increased tax deduction for Research and Development expenses
25 July 2022
In an effort to attract new investments and businesses in Cyprus, an enhanced tax deduction for Research & Development (R&D) expenses was incorporated into Article 9(1)(d) of the Cyprus Income Tax law (ITL). This development is one of the tax incentives included in the Action Plan that was announced back in October 2021.
The amending ITL law was voted by the Cyprus Parliament on 7 July 2022, and it is effective as from 20 July 2022, the date of its publication in the Gazette.
Download the full alert for further details.
Amendments to certain obligations of companies and individuals
6 July 2022
We would like to inform you that during June 2022, the House of Representatives voted into law important amendments in order to ease certain obligations of Cyprus companies and individuals.
Download the full alert for further details about these amendments.
The alert is also available in Greek.
Reminder for 1st provisional tax instalment for tax year 2022
4 July 2022
We would like to remind you that the payment deadline for the 1st provisional tax instalment for tax year 2022 is the 31st of July 2022.
Obligation for provisional tax payment
The following persons have an obligation to pay provisional tax, based on their expected annual taxable income for tax year 2022:
- Individuals with taxable income other than salaries, pensions, dividends and interest, and
- companies with taxable income.
Persons with no taxable income, do not have an obligation to pay provisional tax.
Download the full alert for further details.
Introduction of new Transfer Pricing Documentation Requirements and Provisions for APAs
1 July 2022
On 30 June 2022, a package of measures containing comprehensive transfer pricing (“TP”) requirements for businesses has been voted into law by the Cyprus House of Representatives. The measures are in line with the recommendations of the Organisation for Economic Co-operation and Development (OECD) within the framework of Action 13 of the Base Erosion and Profit Shifting (BEPS) project.
Download the full alert for further details.
Special Defence Contribution law amended to expand the application of the reduced rate of 3%
8 June 2022
On 26 May 2022, the Cyprus Parliament passed into law amendments in the Special Defence Contribution (“SDC”) law, aiming to broaden the application of the reduced SDC rate of 3%. The amending SDC law was published in the Gazette on 8 June 2022 and is effective as from that date.
According to the οld provisions of the law (Article 3(2c)), the reduced rate of 3% applied to interest income received by Cyprus tax resident domiciled individuals from savings certificates and development bonds of the Republic of Cyprus, corporate bonds as well as interest received or credited by a Provident Fund or the Social Insurance Fund.
Download the full alert for further details.
Cyprus Beneficial Ownership Register of Express Trusts and Similar Legal Arrangements
26 May 2022
On 13 May 2022 the Cyprus Securities and Exchange Commission (“CySEC”) announced the launch of the online platform for the Cyprus Beneficial Ownership Register of Express Trusts and Similar Legal Arrangements (“CyTBOR”), which commenced operation on 17 May 2022.
This announcement follows the Directive on the Prevention and Suppression of Money Laundering and Terrorist Financing (Regulatory Administrative Act 257/2021) which provides information and guidance regarding the registration of express trusts and similar legal arrangements in the Trust Register that will be administered by CySEC.
The Directive applies within the framework of article 61C(4)(a) of The Prevention and Suppression of Money Laundering and Terrorist Financing Law of 2007 (as amended) and it aims to enhance transparency in relation to the ownership and control of express trusts and similar arrangements.
Download the full alert for further details.
Extension of the deadline for the submission of 2020 Corporate Income Tax return (TD4) and Personal Income Tax return (TD1A) of individuals preparing audited financial statements (FS)
30 March 2022
We would like to inform you that on 24 March 2022, the Cyprus Parliament voted for an extension up to 31 July 2022 for the following deadlines:
- Electronic submission of the 2020 Corporate Income Tax return (TD4), and
- Electronic submission of the 2020 Personal Income Tax return (TD1A) of individuals preparing audited financial statements (FS).
It is noted that the extension will enter into force on the date that the relevant Decree is published in the Government Gazette, which is expected in due course.
Extension of the tax incentives granted for investment in innovative SMEs until 30 June 2024
21 March 2022
On 10 March 2022, the Cyprus Parliament voted for an extension of the tax incentives for investing in innovative enterprises, which were introduced in the Cyprus Income Tax law (ITL) in 2017, until 30 June 2024. The amending ITL was published in the Gazette on 18 March 2022.
The tax incentives aim to boost entrepreneurship, support start-ups in developing innovative products and services and strengthen the Cypriot entrepreneurial ecosystem.
The following is a recap of the most important provisions of Article 9A of the ITL which provides for the tax incentives. For more details, you can refer to our previous tax alert.
Download the full alert for further details.
Deadline for the submission of beneficial ownership information extended to 31 July 2022
02 March 2022
We would like to inform you that the Department of Registrar of Companies and Intellectual Property has announced that the deadline for the submission of data concerning beneficial ownership is extended to 31 July 2022.
As a reminder, this obligation arises from the “Law for the Prevention and Suppression of Money Laundering Activities” and it applies to all companies and other legal entities that are incorporated or registered in the Republic of Cyprus.
Download the full alert for further details.
Deadline for the submission of Forms T.D.602 and T.D.603 extended to 31 March 2022
28 January 2022
Further to our previous alert on the deadline for the electronic submission of the declarations for SDC and GHS contributions withheld on interest (T.D. 602) and dividend (T.D. 603) payments, the Tax Department has announced that the deadline is extended to 31 March 2022. Submissions made after this date will be subject to a fixed penalty of €100.
Download the full alert for further details.
FAQs issued by the Cyprus Tax Department with respect to Interpretative Circular 3 on intra-group back-to-back financing activities
25 January 2022
On 24 January 2022, the Cyprus Tax Department (CTD) uploaded a new “Frequently Asked Questions (FAQs)” section on its website with respect to Transfer Pricing. The FAQs relate to Interpretative Circular 3 (“the Circular”) which was issued in 2017 in respect of intra-group financing activities of a back-to-back nature. The Circular provides for the application of TP methodology to such activities based on the arm’s length principle as advocated by the OECD.
Download the full alert for further details.
Reminder for the electronic submission of declarations of withheld Special Defence Contribution (SDC) and General Healthcare System (GHS) contributions from Interest and Dividend payments
11 January 2022
We would like to remind you that the deadline for the electronic submission of the declarations for SDC and GHS contributions withheld on interest and dividend payments, made during the period from 1 January 2019 until 31 December 2021, is the 31st of January 2022.
For payments made from 1 January 2022 onwards, the declarations must be submitted by the end of the month following the month in which the withholding was made (i.e. the deadline is the same date as the due date of the payment of SDC and GHS contributions withheld).
Download the full alert for further details.
Cyprus – Jordan tax treaty signed and published
10 January 2022
On 17 December 2021, Cyprus signed a tax treaty for the avoidance of double taxation (the “treaty”) with Jordan, which was published in the Official Gazette on 31 December 2021.
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.
The treaty is based on the OECD Model Tax Convention and incorporates all the minimum standards of the Base Erosion Profit Shifting (BEPS) project, as issued by the OECD/G20.
Download the full alert for further details.
Extension to the deadline for payment of the 2021 annual company levy
28 December 2021
With reference to our previous alert (Issue 21/2021) would like to inform you that that in accordance with the relevant announcement of the Department of Registrar of Companies and Intellectual Property, the deadline for payment of the 2021 annual company levy has been extended from 31 December 2021 to 31 March 2022.
Download the full alert for further details.
Amendments to the Income Tax Law and Special Contribution for Defence Law for the prevention of tax abuse
22 December 2021
On 21 December 2021, two amending laws were published in the Official Gazette that aim to strengthen the Cyprus tax framework for the prevention of tax abuse. The new provisions, which amend the Special Contribution for Defence Law (SCDL) and the Income Tax law (ITL), are effective as from 31 December 2022.
The laws are in line with recent EU Country-Specific Recommendations (CSRs) for Cyprus and the EU guidelines for defensive tax measures to be adopted by EU Member States towards EU blacklisted jurisdictions.
The purpose of the new measures is to prevent aggressive tax planning and make the tax framework fairer and more effective.
Download the full alert for further details.
Deemed Dividend Distribution as at 31 December 2021
21 December 2021
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 2021.
What profits are within the scope of the DDD provisions?
The DDD provisions apply to the profits of Cypriot tax resident companies that are ultimately attributable to shareholders which are Cypriot tax resident and Cypriot domiciled individuals.
These provisions do not apply to the proportion of profits that are ultimately attributable to shareholders which are non-Cypriot tax resident individuals or Cypriot tax resident individuals that are not Cypriot-domiciled (see further below though, on obligation to withhold GHS contributions).
Download the full alert for further details.
The Register of Beneficial Ownership – Submission of data due by 12 March 2022
20 December 2021
With reference to our previous alerts (Issues 13/2021, 02/2021 and 01/2021), we would like to inform you that that the submission of data concerning beneficial ownership is due by 12 March 2022 in accordance with the relevant announcement of the Department of registrar of Companies and Intellectual Property.
Download the full alert for further details.
Reminder for provisional tax for tax year 2021
08 December 2021
We would like to remind you that the 31st of December 2021 is the submission deadline for a revised (where needed) provisional tax calculation for 2021 and the payment deadline for the second provisional tax instalment for 2021.
Provisional tax payment obligation
The following persons should re-consider whether they should submit a provisional/temporary tax calculation and pay provisional tax:
- Individuals with taxable income other than salaries, pensions, dividends and interest, and
- Companies with taxable income.
Download the full alert for further details.
Νo imposition of administrative fines for submission of tax returns until 6 December 2021
02 December 2021
We would like to inform you that the Ministry of Finance has announced that there will be no imposition of administrative fines for the submission of the below tax returns until the 6th of December 2021:
- Electronic submission of the 2019 Corporate Income Tax return (TD4),
- Electronic submission of the 2019 Personal Income Tax return (TD1A) of individuals preparing audited financial statements (FS),
- Electronic submission of the 2020 Personal Income Tax return (Form TD1).
Circular issued setting out clarifications on the penalties imposed for non compliance with DAC6 obligations
26 November 2021
Following the transposition of DAC6 into domestic legislation (click here for our relevant alert) and the issuance of the related Guideline in the form of a Decree (click here for our relevant alert), on 19 November 2021 the Tax Department (TD) issued a Circular which sets out certain clarifications on the administrative fines imposed for non-compliance with the DAC6 reporting obligations.
Download the full alert for further details.
Public CbC Reporting
15 November 2021
In its press release on 11 November 2021, the European Parliament announced the adoption of the Public CbC Reporting Directive (“The Directive”), which has been the result of negotiations for a number of years. The Directive will be published in the Official EU Journal and will come into force 20 days thereafter. EU Member States, including Cyprus, will then have 18 months to transpose it into national law.
Download the full alert for further details.
OECD Inclusive Framework agrees on the design components of Pillar One and Pillar Two
05 November 2021
Since 2017, the 140 member countries of the OECD Inclusive Framework (IF) have been jointly developing a ‘two-pillar’ approach in an effort to address the tax challenges arising from the digitalization of the economy. Two detailed “blueprints” were published back in October 2020 on each pillar, namely, Pillar One that focuses on new nexus and profit allocation rules and Pillar Two for the global minimum tax rules.
Pillar One aims to ensure a fairer distribution of profits and taxing rights among countries with respect to the largest and most profitable multinational enterprises (MNEs), while Pillar Two introduces a global minimum corporate tax rate (recently agreed at 15%) which countries can use to protect their tax bases (the GloBE rules).
Download the full alert for further details.
Decree issued for the application of DAC6
03 November 2021
Further to our previous alert on the transposition of EU Council Directive 2018/822 (DAC6) into domestic legislation, a Decree (available only in the Greek language) was published in the Official Gazette on 29 October 2021, setting out guidelines for the application of the Law.
Download the full alert for further details.
Extension of the period for the application with regards to the Settlement of Overdue Social Contributions
03 November 2021
We would like to inform you that the Minister of Labour, Welfare and Social Insurance, in exercise of the powers conferred by the Settlement Of Overdue Social Contributions Law, issued a Decree (No. 436), which was published in the Official Gazette on 27 October 2021.
Download the full alert for further details.
Cyprus Action Plan for attracting companies to operate or expand their activities in Cyprus
19 October 2021
On 15 October 2021 the Cyprus government presented its Action Plan for attracting companies to operate or expand their activities in Cyprus, in an attempt to make the island a Sustainable Business and Trade Centre of the broader region and Europe.
The new strategy is in line with the guidelines of the European Commission and the Recovery and Resilience Facility, and its implementation aims to create added value to the economy and also redefine the country’s development model.
Download the full alert for further details.
Reminder of the upcoming submission deadlines for CbC Reporting obligations
06 October 2021
We would like to remind you that the 31st of December 2021 is the submission deadline for the following Country-by-Country (“CbC”) Reporting obligations in Cyprus:
- Submission of CbC Reports for the 2020 Reporting Fiscal Year (in respect of MNE groups which have a year end of 31 December 20201)
- Submission of CbC Notifications for the 2021 Reporting Fiscal Year (in respect of MNE groups which have a year end of 31 December 20211).
Download the full alert for further details.
Submission deadline extension for the 2019 Corporate Income Tax return (TD4) and the 2019 Personal Income Tax return (TD1A) of individuals preparing audited financial statements (FS)
24 September 2021
We would like to inform you that in accordance with a Decree issued today, the following deadlines are extended to 30 November 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).
Further extension of the period for non-imposition of administrative fines for overdue submission of DAC6 information
21 September 2021
Following our previous alert on the non-imposition of administrative fines for overdue submission of DAC6 information until 30 September 2021, the Tax Department (TD) has announced that this period is further extended to 30 Νovember 2021.
Download the full alert for further details.
"ERGANI" Information System enters into force
06 September 2021
We would like to inform you that the Ministry of Labour, Welfare and Social Insurance has recently announced that on 13 September 2021, the relevant Social Insurance (Contributions) (Amendment) Regulations of 2017 (Regulations 167/2017) enter into force.
Download the full alert for further details.
Extended deadlines for the submission of tax returns and payment of the final tax as per the relevant income tax return
03 August 2021
We would like to inform you that in accordance with the Decrees issued on 30 July 2021, certain tax deadlines are extended.
Download the full alert for further details.
Decree under the Law Regulating the Settlement of Overdue taxes
29 July 2021
On 23 July 2021 and following the amending law Regulating the Settlement of Overdue taxes published on 29 April 2021, a Decree was published in the Official Gazette, providing details of the process and the years to which the scheme will apply, as well as the reliefs to be provided.
Download the full alert for further details.
Extension to the deadline for payment of the 2021 annual company levy
15 July 2021
In accordance with an announcement made by the Cyprus Registrar of Companie on 8 July 2021, the deadline for payment of the 2021 annual company levy has been extended from 30 June 2021 to 31 December 2021. The extension applies retrospectively from 30 June 2021.
Download the full alert for further details.
Exemption from the obligation to submit a personal income tax return for tax year 2020 for individuals with annual gross income below €19,500
13 July 2021
In accordance with a Decree issued by the Council of Ministers, individuals with annual gross income below €19,500 are exempted from the obligation to submit a personal income tax return for tax year 2020.
As a reminder, the amending Assessment and Collection of Taxes issued in August 2020 provided that as from tax year 2020, it would be mandatory for all taxpayers to submit tax returns irrespective of their income level. The law also provided that the Council of Ministers, through a Decree, may determine the criteria based on which individuals whose gross income does not exceed €19,500 have no obligation to submit a tax return.
Reminder for 1st provisional tax instalment for tax year 2021
6 July 2021
We would like to remind you that the payment deadline for the 1st provisional tax instalment for tax year 2021 is the 31st of July 2021.
Obligation for provisional tax payment
The following persons have an obligation to pay provisional tax, based on their expected annual taxable income for tax year 2021:
- Individuals with taxable income other than salaries, pensions, dividends and interest, and
- companies with taxable income.
Persons with no taxable income, do not have an obligation to pay provisional tax.
Download the full alert for further details.
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:
- New definition of legal person
- Application of Article 11B
- Introduction of Article 11E
- VAT refunds
- Penalties
- Deadline for lodging objection
- Registration/de-registration of non-Cyprus established persons
- Definition of "renovation"
- 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?
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.
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:
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.