In an effort to improve tax compliance and give enhanced powers to the Commissioner of Taxation of Cyprus in respect to the overall tax collection, the Assessment and Collection of Taxes Law was amended and published on the 20 August 2020 in the Gazette together with the release of a subsequent explanatory circular 46 by the Tax Office.
In brief the main and important provisions of the Law are the following:
Obligation to submit personal income tax returns from 2020 onwards
From tax year 2020 onwards, all individuals receiving income (as defined in Article 5 of the Law – i.e salary, rents, dividends, interest, income from disposal of securities etc) are obliged to submit a personal income tax return (IR1 form) irrespective of the fact that such income could be less than €19.500 (tax-free threshold).
An exemption to the above rule would apply to certain categories of individuals with gross income not exceeding €19.500 (under conditions) and as per the provisions of the relevant Decree which is expected to be issued by the Tax Department at a later stage.
Deadlines for the submission of income tax returns and the payment of income tax for tax years 2020 onwards
The deadlines for the submission of income tax returns and the payment of income tax for tax years 2020 onwards are as follows:
| Category of taxpayer | Tax Return type | Submission Deadline | Payment of Tax Deadline |
| Persons who do not prepare audited F/S | IR1 | 31 July of the year following the relevant tax year | 31 July of the year following the relevant tax year |
| Persons and companies that prepare audited F/S | IRI / IR4 | 15 months from the end of the relevant tax year | 1 August of the year following the relevant tax year |
| Employers return | IR7 | 31 May of the year following the year of report | N/A |
Submission of revised income tax returns
Taxpayers are allowed submit a revised tax return for tax years 2020 onwards, within a period of 3 years from the submission deadline of the tax return and provided that the revision of the tax return will be done for correcting an error and be in compliance with the Law or for claiming a tax relief/credit. Note that a revised tax return cannot be submitted during the process of a tax examination by the Tax Office.
For tax years up to and including 2019, revised tax returns will only be accepted if they are submitted within 6 months from the date of entry into force of the amending law, i.e. up to 19 February 2021.