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Friday, 19 May 2017 10:14

New system will allow payment of tax arrears online

The system giving people the ability to pay their overdue taxes online should be up and ready in two weeks’ time, Tax Commissioner Yiannis Tsangaris told MPs on Monday.

Precise details on how taxpayers can access and use the system will be unveiled at the time of launch.

Individuals will need to obtain their log-in data from a Citizens’ Service Centre by showing a valid ID, while corporations will get the access information from the central post office.

An agreement between the Tax Department and the banks allowing for online payment of taxes is expected to be signed over the coming days, Tsangaris said.

Efforts were being made to incorporate payment of VAT as well into the agreement.

In order to pay tax arrears in this way, taxpayers will have to register with the ‘Ariadne’ Government Gateway Portal ( Once logged into the system, a taxpayer will be able to select the mode of payment of tax arrears in instalments. Overdue debts under €100,000 can be paid in 54 monthly instalments whereas those exceeding €100,000 can be paid in 60 instalments. For persons wishing to settle all their tax arrears at once, the Tax Department is offering an amnesty (of up to 95 per cent) on the penalties, such as interest.

For example, if the actual arrears come to €100,000 and the penalties are €30,000, the taxpayer will pay the €100,000 plus 5 per cent of the €30,000. The Tax Department decided to charge the 5 per cent as an administrative fee.

Overall, overdue taxes amount to over €1 billion, Tsangaris said. Currently, there are approximately 1,300 cases before the courts regarding non-payment of taxes.

According to Tsangaris, many of these individuals or corporations have asked for a postponement of the trial on the grounds that they want to make use of the instalments system once it is available.

Although the Tax Department is aware that at least some of these cases are insincere, instructions have nonetheless been given to freeze the prosecutions process and give people the chance to use the online payments system.

Back in January, parliament passed legislation affording people the opportunity to repay overdue taxes in monthly instalments. The law concerns debts to VAT, immovable property, income tax, temporary defence contribution, capital gains tax, inheritance tax, stamp duty, and the temporary contribution in the public and private sectors. The law also affords the Tax Commissioner the authority to decide on discounts, interest, and charges on a case-by-case basis.

Monday, 08 May 2017 00:00

Luxembourg, Cyprus sign tax treaty

Luxembourg and Cyprus have signed a tax treaty, Luxembourg’s Ministry of Finance announced today.

The agreement was signed in Cyprus by Luxembourg Finance Minister Pierre Gramegna and Cyprus Finance Minister Harris Georgiades.

“I am pleased that the text incorporates the latest international standards for exchange and is already fully taking into account the OECD’s BEPS work, thus providing predictability and legal certainty,” Gramegna said.

Cyprus is the only EU State that does not have an in-force tax treaty with Luxembourg.

Gramegna said that negotiations with Cyprus for a tax treaty have been ongoing since 2007. “It was therefore necessary to speed things up and finally come to a conclusion,” he said.

Monday, 24 April 2017 00:00

Tax Haven: Cyprus removal from notified jurisdiction to be effective from November 2013

The Central Board of Direct Taxes (CBDT) has given a big relief to those Indian investors and companies who have raised capital from the tax haven country Cyprus since November 1, 2013.

As against an earlier order of removing Cyprus as a notified jurisdictional area with retrospective effect from November 1, 2013, now the CBDT has said that "it will be effective retrospectively from November 1, 2013."

India blacklisted Cyprus as 'non-cooperative jurisdiction' in November 2013 for not sharing tax-related information. It had classified as a notified jurisdictional area under section 94A of Income Tax Act.

A minimum withholding tax rate of 30% on payments to persons located in Cyprus was applicable at that time. Transfer pricing provisions to transactions with Cypriot persons was also applicable.

After the outcry from investors and cooperative steps taken by Cyprus, the CBDT has revoked the blacklist Notification on 14 December 2016. This step was effective from that date only, not from the retrospective date November 1, 2013. The transactions which already taken place before 14 December 2016 would not get relief by the rescission Notification.

Now CBDT has allowed this relief from November 1, 2013. The higher withholding tax, deemed applicability of transfer pricing provisions would not applicable to transactions with Cypriot persons undertaken on or after November 1, 2016.

Wednesday, 23 October 2013 08:40

Cyprus Immovable Property Tax 2013

On 17 October 2013, the House of Representatives voted for an extension for paying the immovable property tax with a 10% discount. As mentioned in one of our previous articles the deadline for enjoying the 10% discount was 15 October 2013, according to the amendment, the said deadline is extended until 5 November 2013.


It should be noted that the deadline for settling the tax due remains unchanged ( i.e. 15 November 2013). Any payments after the deadline will be subject to an additional 10% penalty.   

Thursday, 03 October 2013 11:15

Cyprus Immovable property tax rates-2013

Immovable property tax is payable on 30 September each year, with exception 2013 for which the payment date has been extended to 15 November 2013. The tax is assessed on the taxpayer's total holding of immovable property in Cyprus as at 1 January of the same year. The reference value are the 1980 value of the related property.

A new law which sets the applicable rates of immovable property tax for 2013 has been passed by the Cyprus parliament and published in the official gazette. The new rates are as follows:


Immovable Property Tax Rates - Cyprus 2013
Band Rate
First € 40,000 0.6%
Next € 80,000 0.8%
Next € 50,000 0.9%
Next €130,000 1.1%
Next €200,000 1.3%
Next €300,000 1.5%
Next €2,200,000 1.7%
Above €3,000,000 1.9%


Properties with value less than € 12,500 are exempt from taxation. However, properties with values above € 12,500 are taxable in full (including the first €12,500). 

As mentioned above, for 2013 the deadline has been extended to 15 November 2013. Late payments will be subject to a 10% penalty. It's worth mentioning that payments made before 15 October will enjoy a 10% discount.