The tax year
The Cyprus tax year coincides with the calendar year, 1 January - 31 December. So, for example, the 2016 tax year begins on 1 January 2016 and ends on 31 December 2016. Business profits earned or accrued during this period will be subject to tax in the 2016 tax year.
To illustrate the entire process, let's assume a Cyprus company was incorporated on 1 January 2016 and has its accounting year from the 1st January to the 31st December. The newly established company, within 60 days from its incorporation (in other words, by end of February 2016), has to register with the Cyprus tax authority and obtain a TIC (a.k.a. tax identification code or tax number).
Corporate income tax deadlines in 2017
Corporate income tax for 2017 is payable in 2 installments.:
By 1 August 2017 the company will have to complete the form TD.6 (Computation of temporary tax by legal persons), whereby it will make a declaration of its 2016 expected (i.e. forecasted) chargeable income and will calculate the tax liability thereof. Together with the TD.6 return, the company will pay 50% of the tax. If profits are not expected for the tax year, the company does not need to compete TD.6 and of cause will not make any payments.
Second and final installment of temporary tax is due by 31 December 2017.
It is also important to note that a revision of the tax amount without incurring the 10% surcharge can be made only up to 31 December of the same tax year.
Corporate income tax deadlines in 2018
The 2016 audit starts as soon as the company finalizes it year end accounts. The result of the audit are the audited financial statements and the corporate income tax return (TD.4) The TD.4 is based on the audited accounts and signed by the auditors or tax consultants as well as by the company director.
A self-assessment is made on or before 1 August 2018 whereby the company states its final 2017 net profit and tax thereof less provisional tax payments made. If there was underpayment of tax, the same has to be paid by 1 August 2018 in order to avoid the accumulation of penalty interest. If the 2017 audit was completed by 1 August then any differences in the provisional tax can be settled together with the self-assessment and in agreement with the TD.4.
The TD.4 form for the tax year 2017 must be submitted on or before 31 December of the following year (that is, 31 December 2018). There is an extension of 90 days if the TD.4 is submitted electronically through TAXISnet, so the deadline becomes 31 March 2019. After the 2016 TD.4 is submitted there are no other deadlines related to corporate tax for the tax year 2017.
The Cyprus Inland Revenue will issue an assessment within 6 years from the time the TD.4 was submitted.
Social insurance, Employers return and Company levy
The following obligations are in respect of tax returns related to the company employees.
First, if a company employed staff in January and paid January salaries, PAYE and social insurance will be due by the end of the following month (28 February). The company has to make payment together with the returns TD.61 and YKE.2. The same schedule of payments for PAYE and SI continue throughout the year.
Following the tax year 2016, sometime in March 2017, the company will complete form TD.63 (Emoluments certificate) form and give it to its employees who will use it to prepare their own tax returns (TD.1) which are due by 30 April
By 30 April 2017 the company has to submit IR.7 (employer's declaration) for 2016 with analysis. A great deal of the information will be coming already from the work completed for the TD.63.
Company levy of €350 for the current year is due before 30 June. Company levy is not paid in the year of incorporation and the year of dissolution.