ISSUING OF INVOICES

According to amendments of section 30(5) of the Assessment and Collection of Taxes Law No. 4/78 (hereinafter called “the Law”), by the amendment law No. 136(1)/2010, which came into force on 1st of July 2011,

 

INVOICES SHOULD BE ISSUED WITHIN:

  • 30 days from the day when a TRANSACTION took a place or
  • a longer period of time if the Director of Inland Revenue has allowed it by a written notice to the concerned person as an answer to the previous relevant application  

Any person, who refuses, omits or neglects to issue invoice within 30 days since the day when the transaction took place, is liable to a PENALTY of €100 for failure to perform duty, prescribed by the Law. The penalty shall be paid per month.

 

Example of the estimation of penalty:

 

Invoice Number

Date of Transaction

Date of invoice

Month of Transaction

Penalty

1

02/02/2012

02/11/2012

February 2012

€100

2

03/03/2012

02/11/2012

March 2012

€100

3

21/05/2012

02/11/2012

May 2012

€100

4

20/06/2012

02/11/2012

June 2012

€100

5

22/09/2012

02/11/2012

September 2012

€100

 

TOTAL:

€500

 

The inspections regarding the failure to perform duty of issuing invoices will start from 1st of January 2012.

WITHHOLDING TAX ON RENT

According to amendments of section 4 of the Special Contribution for Defence of the Republic Law No. 117(1)/2002 as of 1st of July 2011, COMPANIES, PARTNERSHIPS, the GOVERNMENT and LOCAL AUTHORITIES which pay rent (TENANTS) are obliged:

  • to withhold Special Contribution for the Defence at source (from the amount of rent before giving it to the landlord),
  • to file a statement (Form I.R.601A) containing full particulars of the situation in which the Special Contribution for the Defence was withheld and the way of calculation
  • to pay such tax to the Cyprus Tax Authorities (in cash or by cheque payable to “Commissioner of Income Tax”)
  • to complete Form I.R.614A rec once in six months of the tenancy (i.e. 30/06 and 31/12), regarding monthly amounts withheld and give it to the Landlord (The landlord shall submit this declaration with his own tax return)

The present rates are 3% on 75% of the amount of rent. The amount of rent actually paid to the owner of the immovable property will be calculated after deducting the applicable Special Defence Contribution.

 

Any withholding tax must be paid in the month following the month in which it was withheld or ought to have been withheld.

 

Special Contribution for the Defence on rent receivable from abroad must be paid twice per year, in two installments: 30th of June and 31st of December for each year of assessment.

 

PENALTIES:

€100 for non submission of form I.R.601A

€100 for late payment, monthly or half yearly accordingly

5% of the contribution is imposed if the contribution is paid after the due date

 

INTEREST ON LATE PAYMENT:

The public interest rate is applicable.

 

Please note that the Landlord must ensure that correct amount has been withheld and paid. If additional payments need to be made it is obligation of Landlord to do so by self assessment.

 

EXEMPTION FROM THE DEDUCTION OF DEFENCE CONTRIBUTION ON RENTS:

When Landlord is “Non Cyprus Resident” in order to be exempted from the deduction of defence contribution on rents he must submit:

  • Form I.R.614A Decl. This declaration is completed once and if at any time during a year he becomes tax resident, he has to inform the tenant in order to make necessary tax withheld and pay it to the Collection Office of the Department of Inland Revenue
  • Form I.R.614A Q. (must be completed each year)

 

You can download the following forms:

Form I.R.614A Decl - Declaration for exemption from the deduction of defence contribution on rents 

Form I.R.614A rec - Confirmation of withholding of special contribution for defence from rents

Form I.R.614A Q - Questionnaire for ascertaining whether the conditions relating to the term "Non Cypriot Resident" are met for the year ...."

Form I.R. 601A - Payment of defence contribution withheld and self assessment of income subject to defence

REGISTRATION AND OBTAINING A TAX IDENTIFICATION CODE (T.I.C.)

According to amendments to section 5A of the Assessment and Collection of Taxes Law No. 4/78, which is coming into force on 1st of July 2011 Companies are obliged to apply for registration in Cyprus Tax Authorities Company Record and obtain a tax identification code (T.I.C.) within 60 days as follows:

From the date of incorporation in the case of new Cyprus Companies

  • From the date of registration in Cyprus in case of companies, incorporated abroad but registered according to Cyprus Company law
  • From the date when the Company becomes Cyprus Tax resident in case of companies, incorporated abroad

Companies which were incorporated in Cyprus prior to 31st December 2010 but have not yet registered and have not yet obtained a T.I.C. are required to do so prior to 30th June 2011 without suffering any penalties.

PLANNING AMNESTY

The House of Representatives in Cyprus has approved amendments of the Town and Country Planning, the Streets and Buildings Regulation, and the Immovable Property (Tenure, Registration and Valuation) Legislations, which were submitted by the Ministry of Interior.

 

The purpose and scope of the new amendments is to simplify and render the procedures more flexible and updated in order to provide to the Purchasers and Co-owners updated title deeds. The amendments came into force on the 8th of April 2011.

 

Attached is a Copy of the Planning Amnesty Bulletin, released by the Ministry of the Interior.

Please click here to download pdf file.

 

You should read this Bulletin carefully in order to assess if you feel that your Case may fall within this Legislation.

 

For further information, please contact:

Katia Tsangari

Advocate

This email address is being protected from spambots. You need JavaScript enabled to view it.

(+357) 25508000

 

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