How does provisional tax work in Cyprus?

## How it works

Companies and self-employed persons pay provisional, or temporary, tax on their estimated profit for the current tax year. The tax is paid in two equal instalments, on 31 July and on 31 December.

## Revising the estimate

The estimate can be revised up or down until 31 December. That gives a chance to correct it before the second instalment, once more of the year's figures are known.

## The 75% test

If the estimate proves to be less than 75% of the final taxable income, a 10% surcharge applies to the shortfall in tax. This comes from Article 24 of the Assessment and Collection of Taxes Law. The test is applied to the final figures, so an optimistic estimate can be costly.

## Relationship to the final payment

Provisional tax is credited against the final self-assessment payment due on 1 August of the following year. The return itself is due 15 months after year end.

## What Finn does

Finn tracks profit through the year, reminds you before each instalment and flags the 75% test as December approaches. You pay through the Tax Department channels.