M. Target Group kindly reminds you that the submission of the 2024 provisional tax return and the payment of the second instalment of Provisional Tax for both, individuals and companies, is due by 31st December 2024.
Provisional Tax
The provisional tax return requires an estimate of the provisional taxable profit for the current year and the payment of the corresponding provisional tax liability in two equal instalments:
1st instalment: On or before 31 July 2024. Payment can be made within one month of the deadline (i.e., until 31 August 2024) without incurring interest or penalties.
2nd instalment: On or before 31 December 2024. Payment can be made within one month of the deadline (i.e., until 31 January 2025) without incurring interest or penalties.
Please note that the final tax liability for the 2024 tax year must be settled by 1 August 2025.
Who Needs to File?
The following, individuals and companies, should consider whether a provisional tax payment is required based on their expected annual taxable income:
- Individuals with taxable income other than salaries, pensions, dividends, and interest.
- Companies with taxable income.
If no taxable profit is expected, a provisional tax return is not required.
Revision Timelines
A provisional tax return may be revised by the taxpayer at any time before 31 December of the assessment year. In the case of a revision, the Commissioner of Taxation must be notified in writing by completing and submitting a revised provisional tax declaration.
Interests and Penalties
Late payment or underpayment of provisional tax must be settled by the due date, with interest accruing at 1.75% per annum and an additional 5% penalty if the tax remains unpaid two months after the deadline.
If the provisional taxable profit for 2024 is less than 75% of the final taxable profit based on audited financial statements, an additional 10% tax is added to the payable tax liability. For this reason, it may be more tax-effective to make payments through the provisional tax assessment system rather than submitting a nil return and paying the final tax, along with a 10% additional tax, in 2025.
Cyprus tax resident individuals with income sources other than employment may also need to file a provisional tax declaration to settle National Health Contributions related to such income.
As always, M. Target Group specialists remain at your disposal for further information, clarification, or professional assistance with any tax matters.
