Cyprus is going to increase the annual tax from the companies

In connection with necessity of attraction of the international loan and, respectively, increase the budget revenues, the Government of Cyprus intends to increase the annual tax, collected from Cyprus companies. This fee was established by the Law № 117 (1) of 2011, by which amendments were made to the Law on Companies.

The above fee of 350 Euros must be paid by all companies registered in Cyprus  no later than 30 June of the respective year. However, the company is not obliged to pay a fee in the year of its incorporation or in respect of the year of its incorporation.

The current tax that is equal to 350 Euro, will remain so for Cypriot companies, whose turnover does not exceed EUR 100 000 per year. If the turnover of the company exceeds 1 million euros, the annual tax will be increased up to 2000 euros.

It should be noted, that the company shall not be released from the payment of 10% of the corporate tax.

In addition, it is proposed to introduce personal responsibility of directors of companies for the implementation of corporate tax liabilities. Possible adoption of these measures jeopardizes the practice of the so-called nominal service, in the case of which a director and the shareholders are hired on the basis of the contract on rendering of services.