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Temporary Tax Assessment - 2019

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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 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

Your estimation of the taxable profit (if any) must be as close as possible to the actual net taxable profit of the company and any taxes underestimated may be liable to a 10% surcharge.

If you require assistance in calculating your estimated taxable profit, then please provide us with an estimated income statement (detailed) for the year and we will provide you with a forecast income tax computation together with our advice as to whether you should proceed with the filing of a Temporary Tax return or not.

It is important to note that companies with no taxable profits do not need to deal with the submission of this return. 

Revision of the Temporary Assessment form:

Following the submission of the provisional income tax return you may submit a revised declaration at any time before 31 December 2019. However, a revised provisional tax declaration may not result in an immediate refund of the provisional tax already paid until the final tax computations are filed and agreed with the Cyprus tax authorities.

Interest and Penalties 

  1. An administrative penalty of 5% is imposed on each installment if the company fails to pay the declared tax by the due dates stated above 
  2. Interest on an overdue installment of the tax is calculated at an annual interest rate of 4%, in the basis of completed months
  3. If the provisional tax declared is lower than the 75% of the actual tax payable for the year, then a 10% additional is imposed on the difference of the two

 As the temporary tax relies on the management’s best estimate of each company, it is our recommendation that this should be dealt with only by companies which have their accounting records up to date and are in a position to accurately estimate what the expected taxable profits will be at the end of the year. 

For any further information, or if you would like us to proceed with assisting you with the above, please do not hesitate to contact us.

The estimation of profits and transfer of funds in our client account should reach our office by 25th July 2019, otherwise we will consider as an assumption by you of the responsibility to comply with this obligation.

We remain at your disposal for anything you may need in connection with the above.

 

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