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Cyprus Tax Regulations for Corporations in 2024: What You Need to Know

Cyprus Tax Regulations for Corporations in 2024: What You Need to Know

Cyprus Tax Regulations for Corporations in 2024: What You Need to Know

As the tax year 2024 approaches, individuals and companies in Cyprus are required to estimate and prepay their income tax through two equal instalments by specific deadlines. This obligation is based on the anticipated annual taxable income for the upcoming tax year.

Individuals with taxable income beyond salaries, pensions, dividends, and interest, as well as companies with taxable income, are mandated to pay provisional tax. However, those without taxable income are exempt from this requirement.

The computation of provisional tax involves applying the relevant tax rates to the expected taxable income for the year, factoring in any overseas tax credits. Payment of provisional tax is divided into two equal instalments with statutory and effective deadlines as outlined below:

1st Instalment:

  • Statutory deadline: 31 July 2024
  • Effective deadline: 31 August 2024

2nd Instalment:

  • Statutory deadline: 31 December 2024
  • Effective deadline: 31 January 2025

To ensure timely payment, individuals and companies can generate their provisional tax obligations through the Tax Department’s Tax Portal and proceed with payment via credit/debit card or online banking.

Any delays in payment past the effective deadline will incur interest (calculated monthly) along with a 5% penalty on the outstanding tax amount. Furthermore, an additional 5% penalty may be enforced by the Tax Department if taxes remain unpaid two months after the statutory deadline.

Any variance between the actual tax liability and the provisional tax paid for the tax year 2024 must be settled by 1st August 2025.

In scenarios where the declared provisional taxable income falls below 75% of the final taxable income for the year, taxpayers will be obligated to pay an additional tax equivalent to 10% of the variance between the ultimate tax owed and the provisional tax previously paid.

Taxpayers retain the right to adjust their provisional tax calculation (upwards or downwards) until 31 December 2024. In instances of an upward adjustment, interest is charged on the variance between the revised and initially declared amounts, akin to the 1st instalment payment.

Ensuring compliance with these guidelines and meeting the specified deadlines is vital for individual and corporate taxpayers in Cyprus to navigate the provisional tax process effectively for the tax year 2024.

This publication has been prepared as a general guide and for information purposes only. It is not a substitution for professional advice. One must not rely on it without receiving independent advice based on the particular facts of his/her own case. No responsibility can be accepted by the authors or the publishers for any loss occasioned by acting or refraining from acting on the basis of this publication. This article is for informational purposes only. For further advice, please contact us at the contacts listed on the site. 

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