Provisional tax in Cyprus is a system of advance tax payments. It is designed to ensure that taxpayers pay a portion of their expected annual tax liability throughout the year.
Computation of Temporary Tax
According to the Cyprus Income Tax Law, all Cyprus companies must proceed with the submission and payment of the provisional tax.
The temporary tax assessment/estimation is due in two equal instalments before the following dates:
- 31st of July 2024,
- 31st of December 2024.
Entities that do not expect profit for 2024 or do not have taxable income, do not have to submit provisional tax.
The Submission of return and payment of the 1st instalment must be settled until the 31st of July 2024.
If provisional tax payments were made based on an incorrectly calculated yearly taxable profit, the estimated taxable income will be updated (upwards/downwards) at any point before the end of the current tax year on December 31st.
Penalties for Late Submission
The late submission of the return and the late payment of the instalments are liable to a penalty of 5% plus interest of 5% on the payable amount.
Low Estimation of Chargeable Income
Entities who expect to have profits in the year 2024 and do not pay provisional tax will be liable to the additional amount of 10% on the tax payable for the specific year. The same consequences apply for provisional tax payments that will not cover at least the 75% of the final tax for the year 2024.
Need help with provisional tax return?
If you need additional information about the provisional tax or assistance in calculating and submitting the return, contact us. You can reach us by email on info@ibccs.tax or call our office in Cyprus on +357 222 58 777.
