Cyprus issues tax bulletin clarifying payment of taxes in arrears

9 October 2017

Cyprus: On 29 September 2017, the House of Representatives voted to extend the deadline for submission of requests for settlement of tax arrears. The deadline has been extended from 3 October 2017 to 3 January 2018.

In addition, the new legislation restricts the time frame by which unfiled tax returns up to the tax year 2015 may be submitted. Taxpayers have until the 30 June 2018 if they are to benefit from the provisions of the law.

The law refers to a variety of taxes both direct and indirect, specifically:

  1. Income tax
  2. Special contributions for defence
  3. Immovable property tax
  4. Capital gains tax
  5. Inheritance tax
  6. Special contributions for those employed, retired and self-employed in the private sector
  7. Special contributions for refugees
  8. Stamp duties
  9. Value Added Tax

The regulation covers the following taxes:

(a) All taxes that are in arrears up to and including 31 December 2015, which at the date of the application to join the scheme of payments, have been assessed by the Inland Revenue and appear as payable, regardless of the method that they are repaid either by agreement with the Tax Department or via a court order.

(b) Amounts which become payable as a result of the submission of a self-assessment in respect of the tax years up to 31 December 2015 in the situation that the tax returns for the relevant tax year have already been submitted by 3 July 2017, but without payment of the tax due.

(c) the Taxes due which are assessed after 3 July 2017 by the inland revenue relating to tax years until 31 December 2015, provided that tax returns are submitted by 30 June 2018. In such a case, an application for settlement shall be made within three months from the date on which the tax becomes payable, on the basis of the tax assessment which has been issued.

Moreover, it is worth to point out that as from 16 July 2015 individuals who are considered as non-domiciled in Cyprus are not subject to tax in Cyprus on dividends and interest received.

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