Stylianou & Co

PROVISIONAL TAX 2021

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We would like to remind you that in accordance to the Cyprus Tax legislation, every year the taxpayers (legal persons and self-employed individuals) must prepare and submit a Temporary Tax Return declaring their estimated taxable income for the current tax year and pay the relevant provisional tax.

The provisional tax for 2021 is payable in two equal instalments:

– on 31st July 2021 (until 30 August 2021 without interest and penalties)

–  on 31st December 2021

The payment of the Temporary Tax can be made through the Cyprus Tax Portal (via online banking) or through the JCC Smart system (only for payments within the deadline – prerequisite for the payment is the possession of a Cypriot credit card).

If no taxable income is estimated to arise for the year, then the tax taxpayer should take no further action.

If the taxable income declared on the Temporary Tax Return is less than 75% of the final taxable income as determined in the Income Tax Return (T.D.4 or T.D.1) for the year, an additional tax of 10% will be imposed on the difference between the income tax payable as per the Income Tax Return and the provisional tax paid.

Τhe taxpayers can revise its estimated taxable profits either upwards or downwards depending on its anticipated results by 31st December 2021.

When calculating the taxable income for the year there is no need to include any dividend income or profits from disposals of shares and other securities such as debentures, bonds or other corporate “Titles” as these are exempt from corporation tax.

Note that taxable losses brought forward from previous years cannot be carried forward after the lapse of five years from the tax year in which the loss has occurred (i.e. for the tax year 2021, only the unutilised losses from 2016 and onwards can be claimed).

Failure to pay the provisional tax within the above-mentioned deadlines, an annual interest of 1,75% will be imposed on overdue tax for every completed month of delay. Late payments are also subject to a monetary charge of 5% (flat rate).

Our fees for the preparation, submission and administration of payment of the Provisional Tax is between EUR €150-€400, depending on the involvement required by us for estimating taxable income.

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