Obligations

For a Cyprus Company to remain in good standing there are few simple obligations which need to be fulfilled each year. These obligations are usually taken care of by the company’s administrator, allowing you to remain carefree.

A summary of these obligations is shown below:

Statutory Obligations

  • Annual Levy: €350 must be paid every year by the 30th of June.
  • Annual Returns (HE32): Each year the company has to submit the Annual Return with the Registrar of Companies.
  • Annual Audit and Preparation of Financial Statements: All companies, regardless if they are active or not, are legally required to prepare a set of Financial Statement annually and ensure that these are audited by a registered auditor in Cyprus.
  • Notifications of Changes: Any changes within the company’s structure need to be registered at the Registrar of Companies as well as at the Tax Department.

Tax Compliance Obligations

  • Obtainment of a Tax Registration Number: The company has to be registered at the Tax Department within 60 days of its creation.
  • VAT Registration and Submission: Companies which meet the criteria for VAT registration must register with the VAT Authorities and submit the VAT returns quarterly.
  • Company Tax Returns (IR4): All companies are required to prepare and file a Tax Return for each year. It should be noted that Corporate Tax is collected through a self-assessment system whereby the company pays provisional tax on its estimated taxable profits in two equal instalments throughout the year.

Continuous Improvements

Additionally, Cyprus is known for the continuous improvement of its services which can be seen by the fact that the laws and legislations are being adapted and amended for more efficient and streamlined operations.

A few recent examples, leading to further advantages include:

  • The abolishment of Immovable Property tax as of January 2017.
  • The addition of the National Interest Deduction which allows Cypriot companies to deleverage and realize a tax-efficient return on new equity, through the deduction of a ‘national’ interest expense from the taxable income (this can lead to effective rates up to 2.5%).”

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