1. Introduction

On 29 September 2017, a law which extends the deadline for submission of a claim for the payment of tax arrears from 3 October 2017 to 3 January 2018 was passed by the House of Representatives of Cyprus.

The new law also limits the time by which tax returns up to the tax year 2015 not yet filed may be filed. All such tax returns must now be filed until 30 June 2018 to benefit with the provisions of the law.

  1. Taxes covered

The procedure covers the following taxes:
(a) Income tax
(b) Special contribution for defense
(c) Immovable property tax
(d) Capital gains tax
(e) Inheritance tax
(f) Special contribution for employed, retired and self-employed in the private sector
(g) Special contribution for refugees
(h) Stamp duties
(i) Value Added Tax

  1. Tax liabilities subject to regulation

The regulation refers to the below tax liabilities:

(a) All taxes in arrears up to and including 31 December 2015, which at the date of the application have been assessed by the Tax Department of Taxation and appear as payable, regardless of the way they are repaid either by agreement with the Tax Department or pursuant court order.

(b) Amounts which become payable as a result of the submission of a self-assessment in respect of tax years up to 31 December 2015 where the tax returns for the relevant tax year have already been submitted by 3 July 2017, but without payment of the tax due.

(c) Tax liabilities which are assessed after 3 July 2017 by the Tax Commissioner in relation to tax years until 31 December 2015, if these tax returns by 30 June 2018. In such a case, an application for regulation shall be made within three months from the date on which the tax becomes payable, based on the tax assessment which has been issued.

  1. Number of monthly installments and percentage of exemption

Overdue taxes may be subject to the exemption of a percentage of penalties and interest as a result of non-payment of taxes due as follows:

Monthly installments (%) of exemption
(a) one off payment 95%
(b) from 2 to 8 90%
(c) from 9 to 15 85%
(d) from 16 to 21 80%
(e) from 22 to 28 75%
(f) from 29 to 35 70%
(g) from 36 to 42 65%
(h) from 43 to 49 60%
(i) from 50 to 56 55%
(j) from 57 to 60 50%

The payment of the agreed installments is made through the financial institutions.