Special levy tax for Cyprus companies – Circular 17/11/2011

In light of the imposition of special levy tax on Cyprus Companies you are kindly requested to arrange payment of €350.

You are kindly requested to make the relevant payment before 30/11/2011 so that we proceed with filings before the end of the year. Failing to comply with this measure you will have to deal with consequences in point C of the below information. Please contact our office for this arrangement.

A. With regards to Cyprus Companies:

  • According to Law No. 117 (1) of 2011 every company registered at the Registrar of Companies and Official Receiver is obliged to pay an annual levy of €350.
  • For groups of companies the maximum levy is fixed at €20,000. The levy shall be equally spread between all the companies of the relevant group. At the moment there is no definition of what constitutes a “group” for the purposes of this provision and what evidence, if any, will be required to establish the relationship.
  • The levy for the year 2011 should be paid by 31/12/2011 whereas the levy for 2012 onwards must be paid by 30 June of each year.

B. Exemptions:

  • A company is not obliged to pay the levy for the year of its incorporation.
  • Dormant companies which do not have any turnover during the year or assets as well as companies owning property located in the non Government controlled areas of Cyprus are exempted from the payment of the levy.

C. Consequences for delay in payment of the levy:

  • If the levy is not paid within 2 months of the due date a penalty of 10% is imposed which is increased to 30% if the levy is paid within 5 months of the due date.
  • If the levy is not paid within the respective 5 months as explained above then the Registrar shall proceed with the striking off the company in accordance with the relevant provisions of the Cyprus Companies Law.
  • When a company is struck-off it may be reinstated within two years by the Registrar of Companies upon payment of €500. In such case the reinstatement shall be affected immediately.
  • In case the company is not reinstated within two years from the date on which it was struck-off, the Registrar shall make the relevant entry in the Register and reinstate the company upon payment €750.