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Cyprus, like other foreign jurisdictions, periodically, makes legislative changes to the tax system. The latest innovations are related to the corporate income tax. According to the Law of Cyprus "On Income Tax", each Cyprus company must assess the need to file a declaration on the preliminary income tax (IR6), indicating the expected taxable profit for the current year.
If taxable profits are not expected, there is no need to file such a declaration. In the future, on the basis of this declaration, the preliminary tax must be paid in two installments:
The first installment - until July 31, 2017 (this payment can be made until August 31, 2017 without any penalties).

The second installment is until December 31, 2017. The second installment can also be paid together with the 1st to the 31st of August to minimize bank charges and administrative expenses.
Until December, you may not file any declarations and in December submit the final declaration. If the declaration is adjusted to increase the tax, it will be necessary to pay the penalty interest accrued for the difference from August 31 to the date of payment. Example, if the tax is adjusted in December from the amount of 6,000 Euros to 10,000 Euros, the penalty interest will be 23.33 Euros based on the following formula: 2.000 Euros (ie 5,000 Euros - 3,000 Euros) X 3.5% X 4 months (August to November).
It is important to know that an amended pre-tax declaration may not be used to refund overpaid pre tax until final declarations are filed with the Cyprus tax authorities. Therefore, it is important that the company expects a preliminary tax based on real expectations.
If the declared provisional tax is less than 75% of the real amount of tax, according to the final tax return for the year 2017, from the resulting difference, - an additional 10% is levied as a tax.
Penalty interest is calculated at a rate of 3.5% per year from the amount of unpaid contributions (based on the total number of months), as indicated in the example above. In addition, if any tax payments are not paid within a month after the payment date, an additional penalty of 5% is added to the amount of the payment. Tax authorities of Cyprus have the right to sue the company, which in time did not pay the tax specified in the declaration on the preliminary tax.
It is important that the advance tax payments are made on time, in accordance with the established timeframe.