M. Target Group kindly reminds that submission of 2025 provisional tax return and the payment of the first instalment of Provisional Tax for both, individuals and companies, is due by 31 July 2025.
Provisional Tax – 1st Installment
Taxpayers are required to estimate their provisional taxable profit for the current year and pay the respective provisional tax liability in two equal instalments as follows:
– 1st installment: on or before 31 July 2025
– 2nd installment: on or before 31 December 2025
Please note that the final tax liability for the tax year 2025 should be settled by 1 August 2026.
Whom does it concern?
The following taxpayers should consider whether they are liable to submit a provisional tax return based on their expected taxable income:
- Individuals with taxable income other than salaries, pensions, dividends and interest;
- Companies with taxable income.
If no taxable profit is anticipated for the year, there is no obligation to submit a provisional tax return.
Revision Timelines
A provisional tax return may be revised by a taxpayer at any time before 31 December of the year of assessment to which it relates. Is case of revision, the Commissioner of Taxation will need to be notified in writing by completing and submitting a revised provisional tax declaration.
Interests and Penalties
Late or insufficient payment of the provisional tax may result in the following charges:
• Interest at the rate of 1.75% per annum;
• Penalty of 5% if the tax remains unpaid two months after the due date.
Additionally, if the provisional taxable profit declared is less than 75% of the final taxable profit as determined in the audited financial statements, a 10% surcharge on the tax payable will apply.
To avoid this surcharge, it may be more tax-efficient to estimate and pay provisional tax, rather than submit a nil return and settle the full tax liability later in 2026.
Special Note for Individuals
Cyprus tax resident individuals earning income other than employment income may also be required to submit a provisional tax return to cover National Health Contributions applicable to such income.
As always, M. Target Group specialists remain at your disposal should you require any further information, clarification or professional assistance with any tax matter.
