Incorporating a Cyprus Company is an easy and fast procedure, but what about the obligations regarding tax and statutory reporting?
It is very important for every company to comply with the local regulations in order to avoid penalties and investigations by the authorities causing unnecessary hustle.
Annual Return filing.
Cyprus companies are required to submit every year on Annual return accompanied by the audited financial statements of previous financial year.
The submission has to be made within 28 days after the end of a calendar year.
The report should also be accompanied with the certified copies of the financial statements, auditors report and other relevant documentation.
Annual General Meeting.
Cyprus incorporated companies must hold every year the General Meeting by the directors of the company. This meeting is mandatory.Any additional meetings can be taken during the year and are called extraordinary general meetings.Remember that the first Annual General Meeting must take place within 18 months from the date of the registration of the company.
Every Cyprus registered company must pay the annual levy of €350 before the 30 of June of every year.Any delays in the payment of the levy will result penalties. If a company fails to pay the annual levies for two years, will be removed from the registry of companies.
Registration to the tax authorities.
Every Cyprus company is obliged to be registered to the Tax authority to obtain a Tax Id Number (or Tax Identification Code- TIC) within 60 days following the date of the incorporation.
Corporate Tax Return form has to be filled by the 31st of March of the subsequent year of the year following the relevant tax year. Late submission of the Tax return form or late submission of supporting documentation (requests from the taxation Commissioner) can result penalties.
Payments and Refunds.
Cyprus companies have to pay their tax calculated using the self-assessment system method. Companies have to pay provisional tax on the current year’s taxable profit in two equal installments. Installments should be submitted on the 31st of July and 31st of December. The tax-assessment can be revised at any time (by the company) before the 31st of December of the related tax year. In the case where the taxable profit declared for payment of the provisional tax is lower than 75% of the taxable profit determined, the payer (company) must pay the additional amount of 10% on the difference between the final and provisional tax.Bear in mind that any overpaid tax is refunded and carries the interest rate of 3.50%.
Companies incorporated and operating in Cyprus are obliged to comply with the below procedures:
1. Issue invoices.
2. Keep proper books and records and prepare financial statements in accordance with the International Accounting Standards.
- Financial statements should be audited by a licensed auditor.
- Books and records have to be kept up to date at all times.
- All accounting books, records and Audited accounts should be kept for at least six years in the case the Tax department requests to review them.