The 2nd instalment of temporary tax for the fiscal year 2018 is now due for settlement


This is a kind reminder regarding the second and final instalment of the temporary tax return for the year ended 31 December 2018.

It is noted that the respective 2nd instalment of the temporary tax can be settled by 31 January 2019 without any interest and penalties (in case no revised Temporary Tax (form TD6) is submitted).

The 2018 temporary tax assessment may be revised by a taxpayer at any time before the deadline of 31 December 2018 (when a revised temporary tax return is submitted, the deadline is 31 December 2018, not 31 January 2019).

Downward revision of the temporary income can be done only up to an amount that would create a temporary income tax liability equal to the sum of the payment already made up to the date of the revised temporary tax. This, in effect, would create a zero payable second instalment for 2018.

Upward revision of the temporary income creates an increased temporary income tax liability. This in effect results in an underpayment relating to the instalment previously paid, up to the date of revision.

The underpayment needs to be settled and will carry interest of 3.5% per annum. The revised temporary tax assessment (form TD6) should be submitted by 31 December 2018.

Please note that if the temporary income declared is lower than 75% of the final taxable income, the taxpayer must pay an additional tax equal to 10% of the difference between the final and temporary tax paid.

Special Defence Contribution For the 2nd semester of 2018

The payment of Special Defence Contribution on rental income which has not been withheld by the tenant and on overseas bank interest income is due by 31 December 2018.

The payment of Special Defence Contribution for the deemed distribution of the year 2016 is due by 31 January 2019, if the ultimate beneficial owner of the company is a Cypriot tax resident.

Deemed distribution does not apply in respect of profits that are directly or indirectly attributable to shareholders that are non-residents of Cyprus or in the case of individual shareholders which are not considered tax resident and domiciled in Cyprus.

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