According to the Inland Revenue legislation, each company needs to estimate its final taxable income for the current year by 30 June and pay two equal installments on the estimated tax at the following dates (http://www.reandacyprus.com/amendments-to-the-assessment-and-collection-of-tax-law):
1. 31 July - current year
2. 31 December - current year

If the Company fails to do so by submitting the IR6 declarations and its operations result in a taxable profit, then the company will pay a 10% penalty on the assessed tax plus interest (thus result in an effective tax rate of 13.5% instead of 12.5%). In addition, if the estimated tax is lower than 75% of the actual tax, this 10% penalty is applicable on the difference (between actual tax and 75% of the actual tax). If for example the estimated tax is 1.000 euros and the Company pays two equal installments of 500.00 euros, but the actual tax comes out to be 1.500, then there is a penalty of [(1.500*75%)-1.000]*10% = 12.5 euros. Revision of the estimated tax is allowed only up to 31 December of the current year.

In addition and based on the recent amendments of the income tax legislation, if you fail to submit the Provisional Tax returns by the due dates stated above it will result to an interest rate of 4.75% per annum from the original due date, on a complete month basis, plus a penalty of 5%.

It is important to note that NIL returns need not to be submitted. The Income Tax Office however does accept the submission of NIL tax returns from individuals but not for legal entities.

If you would like us to assume responsibility for the preparation of the return and administration of its submission and related payments please get in touch with us by 05 July 2014 to make the necessary arrangements.

Our fees for the above are:

1. Preparation, submission and administration of payment of the Provisional Tax return with taxable income: Euros100-150, depending on the involvement required by us for estimating taxable income.

We will consider no reply to this newsletter by 05 July 2014 as an assumption by you of the responsibility to comply with this obligation. We do not commit to the same prices for any requests in relation to this matter after that date. We kindly request your understanding in this.