Cyprus Fact-File Part 1:
Business Formation for Individuals

1.7 Cyprus Business Accounting

Accounting and auditing requirements for individuals in business

Employers are required to submit a complete payroll analysis of their employees for the previous year, with details of tax deducted, by 30th April.
Companies must file their income tax returns by December 31 following the end of the accounting year, and make provisional tax payments three times during a year, on 1st August, 30th September and 31st December. Any underpayment is due by the following August, and a penalty can be imposed if the income level as given for the purposes of the provisional payments is significantly lower than that given for the eventual tax calculation.
Any amounts of tax outstanding after the due dates may attract interest charges of 5.35% per annum, together with a penalty at the discretion of the tax authorities.

Self-employed persons (eg sole proprietors) that are not required to submit audited accounts with their returns must file their personal tax returns for the previous year by 30th June the following year and must pay any remaining tax due under the self-assessment method by the same date (provisional advance payments are due throughout the year, as with companies). Self-employed individuals that are required to submit audited accounts as well have a filing date of December 31.

There are fines for late filing of VAT returns, currently at EUR51 per late return. Those registered for VAT must maintain proper VAT accounting records and submit returns to the VAT authorities as required. VAT returns must be submitted quarterly and the payment of any VAT due must be made within 10 days of the second month following the end of the tax period to which the return refers. Individuals and companies may apply to the VAT authorities for a different filing period.

Additional Reporting Requirements For Individuals In Business

Where earnings are more than EUR68,344 per annum, audited financial statements must be submitted with the annual tax return.