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

In light of the imposition of the 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 the 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 a case, the reinstatement shall be effected 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.

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