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+357 22-100192  |  Nicosia
+357 25-100692  |  Limassol
Nicosia
Limassol

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We would like to inform you that the deadline for the electronic submission of the 2019 personal income tax returns and the payment of 2019 personal tax has been extended to 30 November 2020.

This extension and obligation for submission applies to:

  • Employees and pensioners (TD1 - Employee) whose gross income exceeds €19.500, and
  • Self-employed individuals (TD1 - Self-Employed) with a turnover that does not exceed the amount of €70.000 and who do not have obligation to prepare audited financial statements.

Prerequisite for the submission of the Return is the registration to the TaxisNet System - Direct Taxation.

If you require our assistance on the preparation and submission of your tax return, you may contact us by 30 October 2020.

Kindly note that our fees for the preparation and submission of a standard tax return amount to €70 plus VAT.

We remain at your disposal for anything you may need.

 

Contact persons


Leonidas Papadopoulos

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+357 22 100 192

Head of Accounting

-

Pavlos Tsiaklides

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+357 22 100 192

Head of Audit

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Annual Levy for Companies

Deadline 31/12/2020

 

With reference to the above subject, we would like to remind you that all companies incorporated in Cyprus, irrespective of whether they are active or not, or have assets or not, are subject to a €350 levy per annum.

The last day of payment of the annual levy for the year 2020 is the 31st of December 2020. For a late payment of the 2020 Annual Levy, a penalty will be imposed from the Registrar of Companies. 

You can proceed with the payment of the annual levy online* through JCCsmart by clicking at:

https://www.jccsmart.com/e-bill/invoices/4260/pay

* (Registration to JCC is required)

 

Otherwise, we can take over the payment of the Annual Levy on your behalf. The procedure that you need to follow is the following:

  1. Transfer the amount of €380 (€350 for the levy payment + €30 to cover our fees and bank charges) to our Clients' Account found below, by 30/10/2020:

CosmoCo Services Ltd (Clients A/C)

Bank of Cyprus Public Ltd

Account Number: 357003572612

IBAN: CY18002001950000357003572612

SwiftCode: BCYPCY2N

 

2. On the bank transaction details, indicate "Annual Levy" and your Company Name.

3. Send us a confirmation e-mail at This email address is being protected from spambots. You need JavaScript enabled to view it. requesting the annual levy payment along with an attachment of the bank transfer confirmation, by 30/10/2020.

 

For those of you that have already paid the Annual Levy, please ignore this email.

Thank you!

 

 

 

 

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On 8 September 2020, Cyprus and Russia signed a protocol amending the double taxation treaty following the conclusion of negotiations in August.

 

According to the agreement reached, the existing withholding tax (WHT) rates on dividend and interest payments made from Russia to Cyprus will increase to 15% subject to certain exceptions.

 

Exceptions from 15% WHT

The two countries have agreed that a 5% WHT should apply, where the recipient/beneficial owner of a dividend is:

  • a regulated entity such as a pension fund or insurance undertaking;
  • a company the shares of which are listed on a registered stock exchange (subject to conditions);
  • the Government or a political subdivision or a local authority;
  • the Central Bank.

Moreover, the two countries have agreed that no WHT shall apply on interest payments if the beneficial owner is:

  • an insurance undertaking or a pension fund;
  • the Government or a political subdivision or a local authority;
  • the Central Bank;
  • a banking institution.

Furthermore, no WHT shall apply in respect of interest earned on the following listed bonds:

  • corporate bonds;
  • government bonds;
  • Eurobonds.

Finally, where the beneficial owner of the interest is a company whose shares are listed on a registered stock exchange (subject to conditions), the WHT shall not exceed 5%.

 

Nil WHT on royalty payments

The nil WHT on royalty payments from Russia to Cyprus will not change.

 

Local Withholding Tax Rates Remain at 0% for Non-Residents

Cyprus will continue to apply no withholding tax on dividend and interest payments to non-residents of Cyprus as per the local domestic legislation.

 

Effective date

The provisions of the amending protocol will come into force as from 1 January 2021.

 

 

The tax team of CosmoCo, monitoring all the ongoing developments, is able to provide you with professional tax advice on how you can incorporate this Double Tax Agreement in your tax planning strategy.

 

Contact persons

Leonidas Papadopoulos                          Pavlos Tsiaklides
This email address is being protected from spambots. You need JavaScript enabled to view it.              This email address is being protected from spambots. You need JavaScript enabled to view it.
+357 22 100 192                                        +357 22 100 192
Head of Accounting                                    Head of Audit

 

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New legislative amendments have been voted in the meeting of the House of Representatives of the Republic of Cyprus held on 31/07/2020 to improve tax collection and address VAT fraud. As published in Cyprus’ official Gazette on 20 August 2020, the following are the main changes to the Cyprus VAT law N. 122(I)/2020 which take effect from the publication apart from two aspects as noted below.

 

1. Extension on Article 11B – Domestic reverse charge on construction services expands to include C2B.

Article 11B shifts the obligation to account for VAT on construction, demolition, repair, or maintenance of any civil engineering project (and in some cases goods provided with the services) from the supplier to the recipient of the services (B2B).
 
Under the amendment, “taxable person” has been replaced with “any person”.
As a result of the amendment, the recipient (being a taxable person) has the obligation to self-account for VAT on the services (or services together with goods) even if the supplier is not a taxable person registered for VAT purposes (B2B and C2B).


2. New Article 11E – Domestic reverse charge on electronic devices

Similar to the Intra-community supplies and Article 11B, the new Article 11E shifts the obligation to account for VAT from the supplier to the recipient of the products under the reverse charge provisions when these are acquired in the course of business activity.
The reverse charge is applied for the below products:

  • Mobile Phones,
  • Integrated circuit mechanisms, such as microprocessors and central processing units, and
  • Game consoles, computer tablets and laptops.

The seller therefore will issue invoices without VAT and the purchaser will be responsible to self-account for the output VAT under reverse charge provisions. Provided such goods are acquired in the course of business activity, the purchaser of the goods has the right for immediate input VAT recovery.

The new provisions are effective from the 1st of October 2020 (as per Article 15(2) of the amendment law) and relate to all transactions made to taxable persons within Cyprus. Reverse charge should be applied from the recipient of the products (provided that is a taxable person) regardless if the supplier is registered to VAT or not (B2B and C2B).


3. Amendment of Article 20 – VAT refund on credit balance

The amendments in Article 20, intrudes the following changes in relation to VAT refunds:

  • The Tax Commissioner reserves the right to suspend the refund of a VAT credit balance and its applicable interest if the taxpayer has failed to comply with the obligation to submit income tax returns.
  • The right to request a VAT refund will be limited to six years from the end of the VAT period in which it arose. Any requests submitted after the six-year deadline has elapsed will be examined at the discretion of the Tax Commissioner.


4. Amendment of Article 45 – Penalties


The amendments in Article 45 include the following changes in relation to VAT penalties:

  • The penalty for late submission of a VAT return increases from €51 to €100 for each late submitted VAT return.
  • With effect from 1st of July 2021, failure to apply the reverse charge provisions as per Articles 11, 11A, 11B, 11C, 11D, 11Eor 12A, will result in the imposition of a €200 penalty per VAT return, but will not exceed a total penalty of €4.000.



5. Amendment of Article 52A – Deadline for submitting an objection to the Tax Commissioner

The deadline for submitting an objection to the Tax Commissioner following the issuance of a VAT assessment is set at 60 days from the date the taxable person is notified of the Tax Commissioner’s decision.


6. Amendment of First Schedule – Non-resident taxable persons

Taxable persons, the obligation to register with the Cyprus VAT authorities without a prerequisite VAT registration threshold.
We will provide more information with a separate e-mail.


7. Amendment of Fifth Schedule – Definition of "renovation"

As per the VAT law, 5% VAT is applicable for all renovations of old private residences.The term “renovation” included only improvements and repairs. With the amendment the term ‘’renovation’’ also includes any additions.
 
For a residence to be considered old, at least three years must have passed since its first occupation.


8. Amendment of Sixth Schedule – Zero rate for international transport

The sixth schedule of the VAT law is amended to provide that the part of the international passenger transport that takes place within Cyprus is subject to a zero VAT rate.


Effective Date of application of the Law amendments

The Law will become effective from the date of its Publication in the Official Government Gazette (i.e. 20 August 2020), with the exception of the following:

  • Reverse charge (article 11 E) will become effective as of 1 October 2020.
  • The penalties in relation to the non-application of the reverse charge mechanism will apply as of 1st July 2021.

Affected businesses should seek immediate guidance to ensure compliance and implementation of potential benefits.

 

 

We are at your disposal to discuss and assist you to meet your tax obligations.


Contact persons


Leonidas Papadopoulos                          Pavlos Tsiaklides
This email address is being protected from spambots. You need JavaScript enabled to view it.              This email address is being protected from spambots. You need JavaScript enabled to view it.
+357 22 100 192                                        +357 22 100 192

Head of Accounting                                    Head of Audit 

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We would like to remind you for the requirements of the Cyprus Tax Legislation (Assessment and Collection Law as amended in 2002, article 24) regarding the filing of temporary tax returns and relevant temporary tax payments for the year 2020.

Please note that a Temporary Tax Assessment of the estimated net taxable profit for the year of 2020 (if any), should be submitted to the Tax Authorities by 31st of July 2020. The resulting tax is payable in two equal installments as per the following deadlines:

  • 1st installment: 31st of July 2020
  • 2nd installment: 31st of December 2020

Any final resulting tax liability for the year 2020 should be settled by 1st of August 2021.

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