Cyprus Tax Update

28 June 2017

Tax Newsletter: Regulation issued for the payment of overdue taxes in monthly installments and relief of interests and penalties

On the 23rd of June 2017 the Cyprus Tax Office issued the Regulation governing the settlement of overdue taxes and the process that needs to be followed in accordance with the new Law that was voted on 3 February 2017. The Regulation was also published in the Cyprus Gazette newspaper and will come into effect as from 3 July 2017.

The main provisions are the following: 

Applicable Laws and Taxes covered

The Regulation covers unpaid tax liabilities for all the years up to and including the tax year 2015 (either assessed by the Tax Office or payable via self assessment) which relate to Income Taxes, Special Defense Contribution, Immovable Property Tax, Capital Gains Tax, Special Tax Contribution, Stamp Duties and VAT.

 

Application Submission

All applications to enter   the payment scheme must be submitted within 3 months from the date the Law enters into force (ie before 3 October 2017) via the electronic ‘’Ariadne’’ tax portal.

Monthly Installments and relevant waiver of interest and penalties

The Tax Office will grant relief of interest and penalties due on the unpaid tax liability depending on the number of agreed monthly instalments as follows:

 

No. of installments

 

Relief granted

(%)

1

95

2-8

90

9-15

85

16-21

80

22-28

75

29-35

70

36-42

65

43-49

60

50-56

55

57-60

50

The settlement scheme ceases to apply immediately in the event of any of the following:  

  • Failure to settle any 3 installments or
  • Failure to settle any installment for a period of 3 consecutive months or
  • Failure to settle a liability that relates to a period after the 31st December 2015 or
  • Where the applicant fails to file any Tax or VAT return which is due for submission during the application of the installment scheme