The Cyprus tax year coincides with the calendar year, 1 January - 31 December. So, for example, the 2023 tax year begins on 1 January 2023 and ends on 31 December 2023. Business profits earned or accrued during this period will be subject to tax in the 2023 tax year.
To illustrate the entire process, let's assume a Cyprus company was incorporated on 1 January 2023 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 2023), has to register with the Cyprus tax authority and obtain a TIC (a.k.a. tax identification code or tax number).
The tax legislation states that if the provisional profit declared is less than 75% of the actual profit; interest and surcharges will be applied on the unpaid amount of tax. For example, a company forecasts and declares €300,000 of net profit. If the net profit turned out to be, say €500,000 and not €300,000, there will be a 10% surcharge on the amount of tax underpayment, in addition to the regular 12.5% corporate tax on the €500,000.
Corporate income tax deadlines in 2023
[01 Aug] By 1 August 2023 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 2023 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 course, will not make any payments.
[31 Dec] Second and final instalment of temporary tax is due by 31 December 2023.
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 2024
[01 Jun] The 2023 audit starts as soon as the company finalizes it year end accounts. The result of the audit is 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.
[01 Aug] A self-assessment is made on or before 1 August 2024 whereby the company states its final 2023 net profit and tax thereof less provisional tax payments made. If there was an underpayment of tax, the same has to be paid by 1 August 2024 in order to avoid the accumulation of penalty interest. If the 2023 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.
[31 Dec] The TD.4 form for the tax year 2023 must be submitted on or before 31 December of the following year (that is, 31 December 2024). There is an extension of 90 days if the TD.4 is submitted electronically through TAXISnet, so the deadline becomes 31 March 2025. After the 2023 TD.4 is submitted there are no other deadlines related to corporate tax for the tax year 2023.
The Cyprus Inland Revenue will issue an assessment within 6 years from the time the TD.4 was submitted.
Quantia Advisors Ltd is a firm of Certified Public Accountants approved and registered to carry on accounting and audit work in Cyprus. Details about our statutory audit and general practice accreditations can be viewed at the Institute of Certified Public Accountants of Cyprus (ICPAC) under reference E264/A/2013 and E264/G/2013, respectively.