Due to the introduction of the GESY health tax, virtually all expatriates in Cyprus must now complete a tax return.

The Cyprus Tax Law was amended in August 2020 that applied to all tax returns due for the periods from 1st January 2020 (The Assessment and Collection of Taxes Law).

This adjust the rules for assessment and collection of taxes and the practical roll out of the ‘how too’ has followed since that date.

Essentially the amendments are to cover the broader liability to flat rate GESY Health Taxes, Property rental taxes, as well as dividends and interest tax liabilities.

Up to 2019 tax year only individuals with income in excess of €19500 need to complete a personal tax return - unless they receive notice to complete a return.

This is bad news for expats who may not have submitted a tax return each year, who then sell Cyprus property and have 7 years of tax returns to complete in retrospect in order to complete the sale.

For this reason ProACT have always advised clients to complete a personal tax return each year.

From 2020 all individuals with any gross income under Article 5 of the Cyprus Income Tax Law are required to submit an income tax return, even if their income falls below the €19,500 threshold. This essentially is to allow Cyprus Flat rate taxes to be collected on worldwide income of tax residents including that from business, pensions, dividends, interest and property rental income.

There can be certain exemptions from this requirement but these would only be confirmed by government decree.

The deadline for annual individual and non audit sole trader tax returns and payment of any balance of tax due is 31st July following the tax year end.

For companies and audited sole trader business the deadline for tax returns is 15 months after the tax year end, ie 31st March, although tax payment balance due date is 1st Aug after tax year end.

A revised return can still be submitted after the initial return is submitted.

As the penalty for late submission can be anything from €100 to €200,

ProACT recommend submitting a return on time, with best figures and adjust if the records need updating.

ProACT also recommend looking forward and planning ahead by expat tax residents.

Given that any Cyprus property owner will need tax returns for each year of ownership when there is a property sale,

and all Probate estates of deceased individuals in Cyprus need annual tax returns before property and investments can be shared to family beneficiaries,

ProACT recommend completing a tax return for each year of tax residence in Cyprus.

ProACT Partnership offer Free Consultant Reviews for all new enquiries to assess if you need to complete a tax return as a Cyprus tax resident.

In addition ProACT offer a Retained Client Service to offer online advice and consultant reviews.