1. Is it possible to receive the financial accounts of a company?
It is possible for the public to obtain financial accounts, provided that the company has submitted the AuditedFinancial Statements at the Cyprus Registrar of Companies
2. Is it possible to know the activities of a company?
In order to find out the activities of a company, you have to ask for the memorandum and articles of association.
3. What is the procedure for the issue of certified copies of Company’s documents kept by the Registrar of Companies?
Any interested person may apply to the Registrar of Companies for certified copies including the following information provided that he has paid the appropriatefees, such as, Directors, Shareholders, Certificate of Incorporation, Registered Office, Good standing, Memorandum & Articles of Association.
4. What is the procedure of Registration of a company in Cyprus?
An application has to be made to the Registrar of Companies for the approval of the name. After the approval of the name, we have to file with the Registrar the necessary documents and relevant fees.
5. How are registration fees calculated and how are increased of capital fees calculated? ?
The amount of registration fees is calculated in accordance with the amount of capital. When there is an increase of capital the fee is calculated according to the difference between the fee payable on the nominal capital of the company and the fee payable on the increased capital.
6. How is capital in Cyprus currency converted into foreign currency?
The registrar is notified by form C.16.
7. How can trademarks and patents be protected?
Protection is safeguarded by registration with the Office of the Registrar of Companies and Official Receiver. Copyright is protected through use. The mark © is noted on the work, as well as the year ofcirculation and the name of the beneficiary.
8. What particulars are necessary for the issue of a solvency certificate?
Name of person, place and date of birth, address, identity card number and telephone number.
9. When is an annual return considered as duly submitted?
The annual general meeting of a company is convened within eighteen months of the date of its registration. Forty two days later the company should file its first annual return with the Registrar of Companies. Once a year the annual return, must be submitted. This should be done within fifteen months from the previous annual return,without disregarding the calendar year (sections 118, 120 and 125 cap. 113).
1. When is a VAT invoice issued; ?
As a general rule, every registered taxable person,
- who makes taxable supplies of goods or services to other taxable persons in Cyprus and/or overseas - makes a supply of goods or services, other than an exempt supply, to a person in another member state - receives a payment on account from a person in another member state for a supply that he has made orintends to make ,
is required to provide them with VAT invoices.
This obligation does not apply if the supply involved is:
- made for no consideration; - made by a taxable person that uses the Profit Margin Scheme. Registered retailers may issue the "retail invoice", if the customer is a taxable person and asks for a tax invoice, provided that the consideration is below €85.
2.When and how is the registration of a person cancelled;?
Registration is cancelled in the following cases:
(i) Cancellation of registration due to decreasing business turn over:
Where any registered person notifies the VAT Commissioner that the value of taxable supplies in one year has fallen below €13.668,81 and applies for cancellation of his registration, then an authorized VAT officer, if satisfied of this fact, shall cancel the registration with effect from the date of the notification or from any other later date as may be agreed between the VAT Commissioner and that person.
(ii) Cancellation of registration due to termination of taxable supplies or termination of the intention tomake taxable supplies
When a registered person ceases to make taxable supplies and is not entitled to remain registered or ceases to have the intention to make taxable supplies, he has to notify the VAT Commissioner of that fact within 60 days of the date of the termination, by submitting an “Application for Cancellation of Registration”(Form VAT 204). Failing to comply, the person is liable to a levy of €85. If an authorized VAT officer is satisfied of the fact of the termination he shall cancel the registration witheffect from the date that the person ceased to make taxable supplies or ceased to have the intention of making taxable supplies or from any other later date as may be agreed between the VAT officer and that person.
(iii) Retrospective cancellation of registration
When the VAT officer is satisfied that on the day when a registered person was neither entitled nor liable to be registered, the VAT officer can cancel the registration and the cancellation takes effect as from the above date. Further information on Deregistration for the cases referred to in paragraphs (i) to (iii) above may be found in information leaflet 4 “Deregistration.”
(iv) Deregistration in the case of Distance Sales
A person registered for making or intending to make dista nce sales in Cyprus, is liable to notify deregistration when he no longer makes or intends to make distance sales in Cyprus and he is not liable to register in Cyprus for any other taxable transactions.
(v) Deregistration in the case of Acquisitions
A person registered for making or intending to make acquisitions in Cyprus, is liable to notify deregistration when he no longer makes or intends to make acquisitions in Cyprus.
Further information on Deregistration for the cases referred to in paragraphs (iv) and (v) above, may be found in information leaflet 3A “Acquisitions and Distance Sales.”
3.When does a person become liable to be registered for VAT and what are the consequences if he fails to be registered? When is a person entitled to be registered?
Liability to register
Taxable Supplies According to the VAT legislation, every person making taxab le supplies is liable to be registered in the following cases:
(i) At the end of any month, if the value of his taxable supplies in the period of one year then ending has exceeded €15.600
(ii) At any time, if there are reasonable grounds for believing that the value of his taxable supplies in the period of thirty days then beginning will exceed €15.600.
A person who by virtue ofi) is liable to be registered, is obliged to notify the VAT Commissioner of his liability by submitting an “Application for Registration in the VAT Register”(Form VAT 101) to the local VAT Office, within thirty (30) days of the end of the relevant month and his registration is effective as from the end of the month following the relevant month or from such earlier date as may be agreed between the person and the VAT Officer.
If a person is liable to be registered by virtue of(ii), he is obliged to notify the VAT Commissioner of hisliability by submitting an “Application for Registration in the VAT Register”(Form VAT 101) to the local VAT Office, before the end of thirty-day period to which the liability arises and the registration is effective as from the beginning of this period.
Failing to comply, the person is liable to a levy of €85 for every month or part of month of the delay or refusal or omission.
Any person making acquisitions in Cyprus is liable to be registered:
(a) at the end of any month , the total value of thatperson’s acquisitions from all other member States in the year beginning from 1 January has exceeded the registration threshold of €13.668,81; or
(b) at any time that there are reasonable grounds to believe that the value of the acquisitions that person would be making in the following 30 days alone will be over the registration threshold of €13.668,81;
A person making acquisitions according to the previous paragraph is liable to notify his/her obligation to be registered on Form VAT 106. Any person liable to be registered by virtue of paragraph (a) above is liable to notify within 30 days from the end of the month in which the liability arises. Any person liable to be registered by virtue of paragraph (b) above is liable to notify by the end of the thirty day period in which the liability arises. Failure to comply renders the person liable to a levy of €85 for every month of the delay or refusal or omission.
Further information on Acquisitions may be found in information leaflet 3A “Acquisitions and Distance Sales.
Any person making distance sales (sales from a person established in another member State), is liable to register for VAT purposes in Cyprus and account for VAT in Cyprus, if in the period starting from the 1st January of the year, the value of distance sales exceeds €35.000. This person is liable to notify liability to register on Form VAT 105, within 30 days from the day that the liability arises. Failure to comply renders the person liable to a levy of €85 for every month of the delay or refusal or omission.
Further information on Acquisitions may be found in information leaflet 3A “Acquisitions and Distance Sales.”
It is clarified that the liability of a taxable person to be registered exists whether or not he has submitted an application for registration. The VAT Commissioner is authorized by the Law to register a taxable person retrospectively, that is from the date that person was, according to the Law, liable to registration. If a taxable person liable to registration neglects to be registered, he is still liable to pay tax on all the supplies he made from the date he was liable to registration.
The VAT legislation provides that Governmental Authorities, Local Authorities and Public Authorities are not deemed to be taxable persons for the supplies of goods or services made by them in carrying out their mission. There are, however, certain supplies explicitly defined in the legislation, for which the aforementioned persons are considered taxable persons.
Entitlement to register
A person not liable to be registered is entitled to be registered in the following cases:
(i) Voluntary registration If a person makes taxable supplies the value of which does not exceed the thresholds that would make him liable to be registered, then he is entitled to apply for voluntary registration by submitting an “Application for Registration in the VAT Register” (Form VAT 101).
(ii) Intending traders If a person engages in a business and intends to make taxable supplies of goods or services, he is entitled to apply to be registered as intending trader by submitting an “ Application for Registration in the VAT Register”(Form VAT 101).
If a person intends to carry out acquisitions or distance sales, he may submit Form VAT 106 or Form VAT 105 respectively.
The registration is effective from the date of the application or any other previous date as may be agreed between the VAT officer and the taxable person.
Additionally, farmers are entitled to voluntary registration, regardless of the value of the supplies they make in the period of one year, which consist of agricultural products of their own produce or agricultural services.
Relevant to the above is the information leaflet 3 “Registration in the VAT Register”.
Additionally, farmers are entitled to voluntary registration, regardless of the value of the supplies they make in the period of one year, which consist of agricultural products of their own produce or agriculturalservices.
4.What books and records must be kept and for how long?
According to section 43 and the Tenth Schedule of the VAT Law, every taxable person must keep books and records and preserve them for at least six (6) years after the completion of the entries or deeds written therein, unless the VAT Commissioner, by relevant notification to the person concerned, fixes otherwise.
Every taxable person has to keep books and records of all the taxable supplies of goods or services he makes or receives for the purpose of his business and for intracommunity transactions he makes. Books and records must be kept up-to-date, with adequate information and in a manner thatenables taxable persons to use them to calculate the payable or claimable amount of tax and fill in tax declarations. Books and records must also be kept in a manner that VAT officers can easily examine them in order to verify VAT declarations but this manner should not be contrary to business practices.
In addition VAT legislation provides for special arrangements concerning keeping books and records in connection with the special regimes i.e. Retail Schemes, Profit Margin Schemes etc.
Taxable persons must keep and preserve the required books and records at the premises of the business. Relevant to the above is chapter VIII of the VAT Guide, information leaflet 10 and information leaflet 12A on the Margin Scheme for Tour Operators, published by the VAT Service.
5.How can a person obtain a certificate stating that any amounts due to the VAT service have been settled for the purpose of submitting tenders to the Government?
An application for this certificate must be in writing. The application must contain the following Information:
(i) Name, VAT Registration Number and telephone number of the taxable person
(ii) The number of originals requested
(iii) The deadline of submission of the tender. As long as certain conditions are met, the certificate is issued and may be collected at VAT Headquarters on the next working day.
6.How does a person fill in a tax declaration, what happens if a tax declaration is submitted with wrong amounts, what happens if a person does not receive a tax declaration form on time and what are the consequences of failing to submit a tax declaration on time?
Every taxable person is liable to submit Tax Declarations (Form VAT 4) and pay the tax that may be due, usually every three months. Tax declarations relate to certain tax periods that are made known to the taxable person at the stage of his registration.
The VAT Service dispatches tax declarations to the last known address of a registered person. The liability to submit tax declarations exists regardless of the relevant form being received or not by the taxable person.Thus, if he has not received it on time, he should contact the VAT Office of his district and ask for the form to be reissued.
Tax declarations must be submitted not later than the 10th day following the end of the month following the end of each tax period. If a tax declaration is not submitted on time, the VAT Commissioner will impose a levy of €51.
On the tax declarations, taxable persons calculate their output tax (the tax on supplies of goods or services and acquisitions they made during the relevant tax period) and their input tax (the tax on supplies of goods or services made to them and acquisitions as well as the tax paid on the importation of goods).
If the difference of the two amounts is positive, then that amount is paid to the VAT Commissioner (debit balance).
If a taxable person finds out that he submitted a tax declaration with wrong amounts, he will have to correct the VAT Account he keeps for the tax period in which the mistakes are spotted. It must be noted than no correction of the VAT Account is allowed if a VAT Officer notifies the taxable person of a control visit.
1. Which persons are liable to INCOME TAX in Cyprus and in respect of what income?
Individual and companies resident in Cyprus are liable to income tax in accordance with the Income Tax Law (Law No. 118(I) of 2002, as amended) in respect of their worldwide income.
An individual is resident in Cyprus, if he/she resides therein for a period or more which in aggregate exceed 183days. A company is resident in Cyprus, if its management and control are exercised in Cyprus. Non- tax residents are liable to tax in respect of Cyprus source income only.
However, non-tax residents having a permanent establishment in Cyprus may elect, if it is to their benefit, to be taxed in accordance with the provisions applicable to taxresidents. The income liable to income tax includes,inter alia, trade income, income from salaried services, pensions, interest, dividends, royalties, any amounts of trade goodwill, etc. The Law stipulates for various exemptions, provided certain conditions are satisfied.
2.Which persons are liable to SPECIAL CONTRIBUTION FOR THE DEFENCE in Cyprus and in respect of what type of income? ?
Special contribution for the defense is imposed in accordance with the Special Contribution for the Defence of the Republic Law (Law No. 117(I) of 2002, as amended) on income from sources in Cyprus, as stipulated below, which is derived by individuals and companies resident in Cyprus.
An individual is resident in Cyprus, if he/she resides therein for a period or more which in aggregate exceed 183days. A company is resident in Cyprus, if its management and control are exercised in Cyprus. The income, upon which it is imposed, is restricted to dividends, interest, rents and the taxable income of public corporate bodies. The Law stipulates for various exemptions, provided certain conditions are satisfied.
3.Which type of income is liable to CAPITAL GAINS TAX in Cyprus ?
Subject to certain exemptions, capital gains tax is imposed in accordance with the Capital Gains Tax Laws 1980-2002, on capital gains arising after 1/1/1980, from the disposal of immovable property in Cyprus or shares of companies in Cyprus which own immovable property.
4.On what value is IMMOVABLE PROPERTY TAX in Cyprus imposed? ?
Immovable property tax is imposed in accordance with the Immovable Property Tax Laws, on the value of immovable property in Cyprus, on the 1/1/1980. This value relates to the value of immovable property which belongs to an individual or a company, on the 1st January each year.