Cyprus companies are obliged to prepare audited financial statements and file tax returns. It is important to know that the company will not be in good standing if the tax returns are not filed on a timely basis and will be refused issuance of any tax certificate. Furthermore there are fixed and variable penalties for late filing. The company and its directors are also liable to criminal offence for non-filing of tax returns.
Audit and Tax Return notification summary for the accounting year 2014
The deadline for submission of Financial Statements and Tax Return for the year ended 31/12/2014 is 31/03/2016 and 31/03/2017 for the accounting year ending 31/12/2015 respectively.
Final 2014 tax was payable by 1/8/2015 and for 2015 tax the payment deadline is 1/08/2016.
In respect to penalties, these are as follows:
- ˆ200 for late submission of returns of 2012 and before and ˆ100 for returns of 2013. From 31/03/2016 ˆ100 penalty will be applicable to 2014 returns submitted with delay.
- variable penalties include the interests on unpaid taxes which are 4% for 2015, 4,5% for 2014, 4,75% for 2013, 5% for years 2012 and 2011, 5,35% for the year 2010, 8% for the years 2007-2009 and 9% up to 31 December 2006.
2015 Provisional Tax
The 2015 provisional tax for the year is payable in two instalments 31/7/2015 and 31/12/2015. The provisional tax is based on an estimation. If no provisional tax is paid, a 10% penalty applies on the final tax payable which is due on the 1/8/2016. The same 10% penalty on the difference applies if the estimation is below 75% of the actual taxable profit.
When a Cyprus company is transacting with another Cyprus or European Union companies (except investment holding, financing, insurance and medical) it maybe necessary for the company to register for VAT and report the transactions to the VAT authorities. It should be also noted that when the Cyprus company is recipient of services (as an expense) from a foreign company (EU or not EU) it is also necessary to register and report it to the VAT authorities. Services received can be marketing, legal, management, promotion, Intellectual property rights, Royalties, accounting, IT services, consulting, legal. Registration in this case is compulsory irrespective of the activities of the company being exempt (investment holding, financing, insurance, and medical). In case you do have transactions falling within these parameters please contact us in order to assess the necessity to register or not for VAT.