What is Provisional (Temporary) Tax?
Provisional tax is paid by companies and self-employed persons on estimated current-year profit, in two equal instalments on 31 July and 31 December.
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Current Rate (Current tax year, instalments 31 July and 31 December)
Two equal instalments. 10% surcharge if the estimate is below 75% of final taxable income
Example
A company estimates tax of €20,000 for the year and pays €10,000 on 31 July and €10,000 on 31 December. If the estimate proves to be under 75% of the final taxable income, a 10% surcharge applies to the shortfall in tax.
How Provisional (Temporary) Tax works in Cyprus
The estimate can be revised up or down until 31 December. Reviewing it before the December instalment is the simplest protection against the surcharge.
The surcharge rule comes from Article 24 of the Assessment and Collection of Taxes Law. It is tested against the final figures, so an optimistic estimate that is too low can be costly.
Finn watches profit through the year and flags the 75% test as December approaches.
Related terms
The TD4 is the annual corporate income tax return for Cypriot companies. It is due 15 months after the tax year end and filed electronically.
Corporate income tax is charged on the worldwide taxable profit of Cyprus tax-resident companies. The rate is 15% from 1 January 2026, up from 12.5% for tax years up to and including 2025.
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