Cyprus Tax Return Deadline 2020
ProACT Sam clarifies the current position on tax payments and the Cyprus tax return deadline in 2020.
Completion of 2019 tax returns rumbles on with 2020 returns due, just what is the current situation?
When is the Cyprus Tax Return 2019 due?
The deadline for 2019 full tax returns in Cyprus was originally 30th June 2020. This deadline has now been formally moved to 30th October 2020.
The only way to submit your tax returns in Cyprus is online, but (at the time of writing this article) these online returns are still not available at 2nd July. However, they will be soon. Registered users will be notified by email when submission is available.
BALANCING PAYMENT 2019
The statement with this announcement covered balancing payments for outstanding tax for 2019, not paid at source or by self assessment.
The balancing payment deadline was 30th June, it is now 30th October 2020.
Who submits tax returns in Cyprus?
All tax residents of Cyprus who are:
Employees
Retired
Self employed with Turnover below Euro70,000
Self employed people with businesses that have a turnover above Euro70,000 need full, audited tax and financial statements. These businesses have extra months to complete their returns.
If you need an audited 2019 self employed tax return for Cyprus, contact us.
2020 temporary tax payment deadlines
From 1st June, all Cyprus tax residents can declare and pay any income tax due for 2020 where the income tax is not deducted at source.
This means that anyone with earnings, pensions, rentals received gross and liability to income tax in Cyprus, must make a self assessment and pay the tax they think is due for 2020 income.
When do 2020 tax payments in Cyprus need to be paid?
This self assessed ‘temporary’ tax payment is made in 2 instalments: Payment 1 is due from 1st June 2020 and by the end of July 2020. Payment 2 is due in December.
If you need help preparing and submitting a temporary self assessment income tax payments for Cyprus, contact ProACT Partnership - www.proactpartnership.com/contact-us.
Other 2020 Cyprus tax payment deadlines
Unless you have an exemption certificate from Cyprus tax for health, dividends, rental or savings, then these taxes should be paid during the year also by Self Assessment.
If these incomes are taxed at source then you don’t need to pay twice if the correct registrations are in place.
If you need help preparing and submitting other self assessment tax payments for Cyprus, contact us at ProACT Partnership www.proactpartnership.com/contact-us
Balancing payments on full tax returns
With the full Cyprus tax return, any balancing payment due is the difference between the self assessed tax payments paid during the current tax year, e.g. during 2020, and the full tax return calculation of tax due. The 2020 return will be due next year, in 2021.
For 2019, tax payers this year will pay any tax not paid by self assessment in 2019. If you did not pay enough tax by self assessment you will be charged an interest penalty.
Obligation to submit a tax return or make a payment
If you have been issued an S1 tax exemption certificate, you do not have to pay Cyprus Health Tax as a temporary or balancing payment.
If you have been issued a Non-Dom exemption certificate, you do not have to pay Dividend Tax or Savings Tax.
If your gross annual income does not exceed €19,500, the tax office have confirmed you don’t have an obligation to complete a full Cyprus return.
Capital Asset Transfers
We have no definitive clarity from the tax office and there is a contradiction. You need capital gains and income tax clearance to complete a property transfer or probate administration on an estate.
Our experience (including and up to July 2020) is that the income tax office will require a tax return for each year of tax residence of the deceased or seller. Then when assessments are made, penalties and interest is charged on late returns or taxes due.
ProACT advice is to protect yourself by completing and submitting a tax return each year. For help and guidance, contact ProACT Partnership www.proactpartnership.com/contact-us
Tax Liability for Low Income Earners in Cyprus
If your income is below € 19,500 you could still have liability to Cyprus Flat Rate Tax as this personal allowance is against income tax only, not against any liability for rental, dividend, interest or health taxes.
Unless you have exemption certificates taxes are payable, using the temporary or full tax return procedure, for which you need to be registered.
If taxes are not paid as due, penalties could apply at a later date.
Taxes due for low income Cyprus Tax Residents without exemption certificates:
a/ a Euro10,000 per annum self employed online overseas earnings is liable for health tax at 1.7% for 2019.
b/ Euro15,000 dividend income from an overseas service company is liable to dividend tax at 17% and health tax at 1.7% for 2019
c/ Euro6,000 holiday property rental income is liable to 3% property tax and 1.7% health tax.
d/ Euro 18,000 overseas bank interest income is liable to 30% savings tax and 1.7% health tax.
CAUGHT UP
When in later years a tax clearance for say, a Cyprus property is sought, the tax clearance practice is to require income tax returns (if not previously made). This can lead to potential issues for Expats with late return and payment penalties.
ProACT advice is to protect yourself by completing and submitting a tax return each year. For help and guidance contact us at www.proactpartnership.com/contact-us
If you need help to assess your true liability for Cyprus tax in 2019 and 2020 including for Family, Business and Low Income Tax payers, contact us at ProACT Parnership.
ProACT Know-How
ProACT Partnership know how to assist Expat families and businesses who are Cyprus Tax residents Living and Working Abroad, to produce temporary self assessments and produce/submit full returns.
For help and assistance to protect your family and business across border and down generations www.proactpartnership.com/contact-us