TAX NEWS 02/2016
Provisional tax 2016
Income Tax Law in Cyprus provides that every company and self-employed person submits a temporary estimate of the taxable income and the resulting tax, by 31st of July of each calendar year. There is no obligation to submit zero returns.
The declared taxable income must not be less than 75% of total taxable income for the year otherwise a 10% additional tax will be imposed.
The applicable tax rate for companies is 12,5%
Provisional tax is payable in two equal installments
• 31 July 2016-Submission of provisional tax return and payment of the first installment and
• 31 December 2016 – Payment of the second installment
Any delay in payment will be subject to interest (currently 4%) and a 5% penalty.
Revised computations can only be submitted by the 31st December 2016. If a revised computation is submitted, the amount of tax must be divided into two equal instalments and interest is chargeable on the additional tax of each instalment.
In addition to the provisional tax, a self-employed person must also pay Special Contribution. Calculation of Special Contribution is based on the expected profits of year 2016 and cannot be lower than the amount on which contributions are paid to Social Insurance Fund. Same interest rates and penalties apply as in the case of provisional tax. Payment is made in two equal installments with the same procedure and dates provided for the provisional tax.
You are kindly requested to inform us about the expected taxable income of year 2016 by 20th of July 2016 and submit to our office the amount required for the 1st instalment of provisional tax, by cheque or by making a bank transfer .
For any further information please contact our tax department
Our fees for the preparation and submission of provisional tax return are €119 including VAT for each physical or legal person.