The Cyprus Tax Department has announced the implementation of a new unified tax management system called "Tax For All" or TFA, that will replace the existing TaxisNet platform.
What is TFA?
Through TFA, taxpayers will maintain a tax profile and be informed of their tax liabilities, be able to pay taxes, issue certificates and submit tax refund requests and appeals. The new system will be implemented in three stages and will replace all existing systems and electronic applications operating today. All taxpayers will gradually be transferred to TFA. In order for the transition to take place, the taxpayers must have a valid email address.
What do I have to do?
Visit TaxisNet (https://taxisnet.mof.gov.cy), log in with your credentials and make sure that your email address is up-to-date.
You may also visit the following relevant link from the Tax Department that includes guidance in Greek:
Tax Department: Email update guidance
We remain at your disposal for anything you may need.
Contact person
Stelios Ioannou
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+357 22 100 192
Managing Director
According to Circular 1/2023 of the Commissioner of Taxation, issued on 5 January 2023, “back-to-back” financing arrangements are retroactively terminated as of 31 December 2021.
Thus, from 1 January 2022 onwards, the recognition of the after tax net taxable profit margin of 2% (i.e., the simplification measures of intra-group “back-to-back” financing transactions) will no longer be applicable.
In addition, from 1 January 2022, the intra-group “back-to-back” financing transactions together with any other related party transaction must be executed at an arm’s length basis and normal commercial terms, and Companies may be required to prepare a transfer pricing study and a local file covering these transactions.
We remain at your disposal for anything you may need.
Contact person
Stelios Ioannou
This email address is being protected from spambots. You need JavaScript enabled to view it.
+357 22 100 192
Managing Director
Every Cyprus tax resident company must declare, at least, the 70% of its accounting profits for the year 2020 by 31 December 2022 and pay the special contribution for defence of 17% and National Health Contribution of 2,65% by 31 January 2023.
Deemed Dividend Distribution (DDD) provisions
According to the DDD provisions, a Cyprus tax resident company should distribute at least 70% of its accounting profits to its Cyprus tax resident shareholders, as dividends, within two years from the end of the tax year to which such profits relate. If the aforesaid profits (or part of them) were not distributed, then the relevant undistributed accounting profits would be considered as "deemed distributed" and the relevant Special Defence Contribution would need to be paid.
DDD provisions are applicable in cases that a Cyprus tax resident company has shareholders that are Cyprus tax residents and Cyprus domiciled and the Cyprus tax resident company has not distributed at least the 70% of its accounting profits for a specific tax year.
The DDD provisions also apply for National Health Contribution purposes in cases that a Cyprus tax resident company has ultimate shareholders Cyprus tax resident individuals (domicility is irrelevant).
Therefore, in the case that a Cyprus tax resident company has failed to distribute at least the 70% of its accounting profits for the year 2020 by 31 December 2022, then the DDD provisions of the Special Contribution for the Defence Law will come into force.
The deemed dividend distribution provisions on the accounting profits for the tax year 2020 will be triggered on 31 December 2022. The said provisions will come into force in case a Cyprus tax resident company does not distribute at least 70% of its 2020 accounting profits by 31 December 2022.
The National Health Contribution should also be paid by 31 January 2023 for the undistributed accounting profits.
Whereas a Cyprus tax resident company is ultimately owned by a non-Cyprus tax resident individual, the DDD provisions are not applicable.
The relevant form to be submitted by the end of the following month of the dividend declaration (actual or deemed) to the Tax Authorities is T.D. 603.
In the case of late payment of the special contribution for defence and national health contributions then there will be an imposition of interest at the rate of 1,75% per annum and to a 5% penalty of the tax due. It should also be noted that an additional 5% penalty may be imposed in the case that the special contribution for defence remains unsettled two months after the above due dates. Also, there is a penalty of €100 if the T.D. 603 form is not submitted within the deadlines.
We remain at your disposal for anything you may need.
Contact person
Stelios Ioannou
This email address is being protected from spambots. You need JavaScript enabled to view it.
+357 22 100 192
Managing Director
The Social Insurance Contributions rate of 8,3% is applied to a maximum level of emoluments.
For 2023, the yearly maximum level of emoluments is €60.060.
The rate of 8,3% applies for both the employer and the employee as from 1 January 2019 and for the next five years. Thereafter, the rate will increase every five years by 0,5% until it reaches 10,3% as from 1 January 2039.
The following table summarises the changes in the maximum level of emoluments, over the years 2019 - 2023:
We remain at your disposal for anything you may need in connection with the above.
Contact person
Stelios Ioannou
This email address is being protected from spambots. You need JavaScript enabled to view it.
+357 22 100 192
Managing Director