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Cyprus Tax Matters: Temporary Tax 2023

Cyprus Tax Matters: Temporary Tax 2023

The deadline for the first instalment of the Temporary Tax Assessment for the year 2023 in Cyprus is approaching and it is recommended that businesses contact their tax advisors to ensure tax compliance.

Obligation to Submit Estimation of Chargeable Income

In accordance with Section 24 of the Assessment and Collection of Taxes Law of 1978 (L.4/1978), as amended, all companies must notify the Tax Department of their expected annual taxable income and the resulting tax thereon, by 31st July 2023.

Based on the Income Tax law, all Cypriot tax resident companies are taxed at the rate of 12.5% on their taxable income.

Payment of Tax

Based on the temporary tax computation, tax is payable in two (2) equal instalments as follows:

Round of Instalment Deadline
1st instalment 31 July 2023
2nd instalment 31 December 2023

The taxpayer should create the provisional tax obligation through the Tax Portal of Cyprus’ Tax Department under Temporary Assessments with code “0200 – Income Tax (Individuals and Legal Persons)”.

After that, a selection of two (2) payment methods next to the Payment Reference Code will appear having the below icons:

  • Credit/debit card which automatically transfers you to JCCsmart gateway; or
  • Online banking.

Any difference between the actual tax payable and the temporary tax paid for the year 2023 is payable by 1st August 2024.

Penalties

Non-payment on the due dates entails interest at the rate of 2.25% per annum (calculated on a completed month basis) plus a monetary charge of 5% on the tax due.

In addition, payments made after the effective deadline can only be made via online banking.

It is therefore recommended that all businesses give due consideration to the matter, and proceed with the relevant payments on time, to avoid any penalties and charges.

10% Additional Tax

If the estimated chargeable income declared in 2023 is less than 75% of the chargeable income finally determined for the same year, then any balance of tax payable is subject to an additional 10% charge.

Notable Revision

Revision of the original declaration is possible by 31st December 2023, with any revised tax amounts be equally apportioned over the two (2) instalments, thus attracting a 2.25% interest p.a. on past due instalments (in case the revision results in an increase of the amount paid for the first instalment).

ServPRO: Your trusted tax partner.

Our Tax Department has been thriving for over a decade, with our clients seeking our professionals’ advice and assistance in all aspects relating to taxation for corporates as well as individuals, in line with the latest local and international tax developments.

Our clients entrust us with the structuring of their operations, by taking maximum advantage of the applicable tax incentives while ensure compliance with any and all of their tax obligations and filing of their tax returns. The exceptional quality of our tax professionals is the reason why our clients select us to be their entrusted tax partners.

Contact us today to get your tax affairs in order.

For more information on this topic contact us by telephone (+35722021100) or via email ([email protected]).

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