Flat annual levy for all Cyprus Companies

The new amendment of the Companies Law (no. 117(1)/2011) passed on the 7^th of December 2012 by the House of Representatives, provides the following:

a. All existing registered companies are required, with regards to the current year, to proceed with the payment of a Levy of €350 (hereinafter referred as ‘the Levy’), not later than the 30th of June of each year.

b. A company shall not be required to pay such Levy, in the year of incorporation.

In case that there is delay in the payment of the Levy the following penalties will apply:

• Up to 2 months – 10% (3^rd of July - 31^st of August):  €385

• 2 to 5 months – 40% (1^st of September – 31^st November): €490

After 5 months- the Registrar will de-register the Company. Re-registration of the Company can be made within two years with a payment of €500 annual fee. In case that the re-registration will take place after the period of two years from the date of de-registration the annual fee increases to €750.

c. Companies which were exempted from the payment of the annual fee for 2012, in accordance with the previous legislation, will now have to proceed with the payment prior to the end of March 2013.

Delay in the payment of the levy will incur penalties ranging from 10% to 30% even leading to the company’s removal from the Registry. Removal from the Registry will automatically exclude the company from filing any documents or requesting certificates from the Registrar’s Office while possibly facing problems with the legality of the transactions to which it is engaged.

The deadline for the payment of the Levy as from 2013 onward will be 30 June.

Increase in the Cyprus VAT rate

For the period from 14 January 2013 to 12 January 2014 the standard VAT rate will increase from 17% to 18% for the supply of goods and services. 

Furthermore, as from 13 January 2014 the standard VAT rate will further increase from 18% to 19%. Therefore, all the supplies of goods and services that are currently taxable with the standard VAT rate of 17%, will become taxable at the rate of 18% from 14 January 2013.

The supplies of goods and services that fall under the zero VAT rate or are exempt from VAT will continue to have the same treatment for VAT purposes after 14 January 2013.

In addition, please note that the change in the standard VAT rate will not affect the reduced rates of 5% and 8% for the period 14 January 2013 - 12 January 2014. As from 13 January 2014, the reduced rate of 8% will increase to 9%. 

With the forthcoming increase of the standard VAT rate from 17% to 18%, please note that the transitional provisions of Article 55 of the VAT Law apply, based on which a taxable person selling goods or providing services has the choice of applying the old VAT rate (17%) or the new VAT rate (18%), but only for certain cases.

For more information, please contact us.