We would like to inform you that the 2018 Corporate Income Tax Return (T.D.4) template has been published by the Cyprus Tax Authorities.
Deadline
Please note that the 2018 T.D.4 needs to be submitted electronically (through Taxisnet) by the 31st of March 2020.
Failure on submission
A penalty charge of €100 is imposed for failure to submit the 2018 T.D.4 within the deadline.
In the cases that the tax return is requested by the Cyprus Tax Authorities (CTA) in writing, then the penalty for failure to submit within the due date is increased to €200.
It is also noted that in the 2018 T.D.4, the tax authorities have included an additional field, requesting taxpayers who deal in intra-group financing arrangements to confirm whether a Transfer Pricing Study (TPS) has been prepared in order to support the taxpayer’s position or whether the safe harbour rules were followed.
Kindly note that if a taxpayer selects to apply the safe harbour rules, then the back-to-back financing arrangement could still be reported to foreign tax authorities under the exchange of information rules.
Brief explanation of Transfer Pricing Circular
The Cyprus Tax Authorities (CTA) have issued on 30 June 2017 the Circular in relation to the Transfer Pricing Framework (the “Circular”), for companies carrying out intragroup financing activities in Cyprus.
The “Circular” is effective as from 1 July 2017.
The “Circular” applies to the following entities which are involved in back-to-back intragroup financing transactions:
- Tax resident entities.
- Permanent Establishments.
Back-to-back intragroup financing need to meet the following criteria in order the “Circular” to be applicable:
- Granting of loan or cash advances to related companies.
- The granting of loan or cash advances to be interest-bearing (or should be).
- Financed by financial means (e.g. debentures, private loans, cash advances and bank loans).
- Intermediary financing company is Cyprus tax resident.
Transfer Pricing Study (TPS)
TPS is the supporting document to be provided to Cyprus Tax Authorities as evidence that the transaction which took place was based on the Arm’s Length Principle.
In case you have intra-group back-to-back financing arrangements, for which no transfer pricing study has been prepared, it is highly advisable that you should contact us in order to support the Company’s tax position.
We are at your disposal for any further information or clarification you need.
Contact persons
Leonidas Papadopoulos
(Head of Accounting)
This email address is being protected from spambots. You need JavaScript enabled to view it.
+357 22 100 192
Pavlos Tsiaklides
(Head of Audit)
This email address is being protected from spambots. You need JavaScript enabled to view it.
+357 22 100 192
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 2019.
Please note that a Temporary Tax Assessment of the estimated net taxable profit for the year of 2019 (if any), should be submitted to the Tax Authorities by 31st of July 2019. The resulting tax is payable in two equal installments as per the following deadlines:
- 1st installment: 31st of July 2019
- 2nd installment: 31st of December 2019
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 2019 is the 30th of June 2019. For a late payment of the 2019 Annual Levy, a penalty will be imposed and the total amount to be paid will be as follows:
- €385 from 01/07/2019 until 31/08/2019
- €490 from 01/09/2019 until 30/11/2019
You can proceed with the payment of the annual levy online* through JCCsmart by clicking at:
https://www.jccsmart.com/e-bill/invoices/2749/pay
* (Registration to JCC is required)
We would like to inform you that the deadline in relation to the following, has been extended from the 31st of March 2019 to the 30th of April 2019:
- Electronic submission of the 2017 corporation tax return for accounting periods ending on 31 December 2017 (TD4).
- Electronic submission of the 2017 income tax return of physical persons preparing audited financial statements. (A physical person is obliged to submit audited financial statements if his/her turnover exceeds €70.000 annually.)