As you may know, during the COVID pandemic, Cyprus authorities have introduced a number of restrictions for local entrepreneurs. Such actions affected small and medium-sized businesses that now need support. To help them, the Department of Registrar of Companies and the Tax Department have developed a bill.
They proposed to postpone the annual company levy of 350 euros, which all companies of the Republic are required to pay.
On Monday, December 2, the Ministry of Energy, Commerce, Industry and Tourism announced that it was decided to postpone the payment of the annual fee for three months - until March 31, 2022.
This is the second extension this year. The first one was until December 31, 2021.
As you may know, the company levy of 350 euros must be paid by all registered resident companies of Cyprus to the island's budget no later than June 30 of each year, regardless of whether they conduct any activity, own assets or not.
An annual tax of 350 euros for companies was introduced in Cyprus during the financial crisis of 2013. Thanks to this collection, every year the state receives about 40-45 million euros in company taxes.
There are several important remarks:
- if a company is registered after June 30, it does not pay an annual fee for the first year of its existence;
- if a company in the liquidation process, initiated before the end of June, it does not pay for the last year of its existence.
It is important to take into account that the following penalties are imposed on the company for late payment of the annual state fee:
- 10% if the delay is up to 2 calendar months I (until 31.08. - 385 EUR);
- 30% if the payment is delayed for a period of 2 to 5 months (up to 30.11. in the amount of 490 EUR).
Refusal to pay the annual fee may lead to the exclusion of the company from the Cyprus Registrar of Companies, after which the company will no longer be able to submit to the Registrar or request any documents or certificates from the Registrar. If the company levy is not transferred within a year, except for penalties, the company receives a cancellation of registration and can be completely excluded from the Registrar.
There are several options to pay the annual corporate tax:
- By debit/credit card, online via JCC.
- At the cash desk of the Registrar of Companies in cash or by check.
- On the official website of the Registrar of Companies.
It is worth noting that recently the opposition parties DIKO, EDEK, ELAM and the Greens proposed to cancel the company levy – they submitted for discussion a new bill, which is expected to be considered in January 2022.
The idea of canceling the annual fee has already been supported by the AKEL and DIPA. AKEL proposed to abolish the tax for small and medium-sized businesses and introduce its gradual abolition for large business companies.
By the way, the developers of the bill stated that the cancellation of the fee is advisable, since the country has been out of the program of support for the "troika" of international creditors for several years. In addition, this idea was supported by business representatives, as well as the Cyprus Bar Association.
Onoufrios Koulla, a deputy from the DISY, opposed the cancellation. He said that the country's economy is not in the best shape due to the pandemic, so we need to find an option that would not cause damage to it.
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