End-to-end workflow for preparing and filing a Cyprus-resident company's annual Corporation Income Tax return (IR4), covering statutory accounts, the 12.5% CIT computation, IP Box relief, provisional tax instalments, and dividend extraction planning for owner-managed companies.
Confirm the company is genuinely Cyprus tax-resident (place of effective management and control is in Cyprus — board meetings, decisions, directors). Identify the tax year (calendar year), registered office, nature of trade, and any related-party or cross-border element. Substance failure means the company cannot claim the 12.5% CIT rate or IP Box. Also confirm whether the company is within scope of OECD Pillar Two (global revenue ≥ EUR 750 million).
Compile the company's statutory financial statements under Cyprus Companies Law (Cap.113) and IFRS or IFRS for SMEs. All Cyprus companies are required to maintain proper books of account; companies with turnover above EUR 70,000 must have their accounts audited by a Cyprus-registered auditor before the IR4 can be submitted. Obtain the signed trial balance, bank reconciliations, fixed-asset register, and payroll summaries.
Start from accounting profit and apply Cyprus Income Tax Law (Law 118(I)/2002) adjustments: add back disallowed expenses (entertainment, non-business costs, non-trade interest, fines); deduct exempt income (dividends received, gains on disposal of titles/securities). Apply wear-and-tear (capital) allowances in lieu of depreciation. Identify any trading losses carried forward from prior years. Apply the 12.5% CIT rate (or 15% if Pillar Two applies). For companies with qualifying IP income, apply the IP Box 80% deemed deduction to arrive at the ~3% effective rate.
Cyprus companies pay provisional (temporary) CIT in two equal instalments: 31 July and 31 December of the tax year, based on the company's own estimate of its taxable income for the year. If the provisional tax declared is less than 75% of the final CIT liability, a 10% surcharge is imposed on the shortfall. Review the prior-year final liability and current-year trading performance to set a defensible estimate. An upward revision can be submitted before each instalment date.
Verify the company's VAT registration status (compulsory at EUR 15,600 turnover; standard rate 19%) and confirm VAT returns (VAT4 form, quarterly) are up to date. Review PAYE obligations: employer must remit monthly PAYE and Social Insurance contributions (employer SI 8.8% + GHS 2.90% + Social Cohesion Fund 2.0% + other levies) by the end of the following month and file the annual IR7 employer return. Confirm all TD63 emoluments certificates have been issued to employees.
Finalise and submit the IR4 Corporation Tax Return electronically via TAXISnet (or Tax For All from tax year 2026). The IR4 deadline for companies with audited accounts is 31 March of the second year following the tax year (e.g. 31 March 2027 for TY 2025). After filing, advise the owner-manager on dividend extraction: Cyprus-resident non-domiciled shareholders pay 0% SDC and 0% PIT on dividends (only GHS at 2.65% up to EUR 180,000 applies). Domiciled shareholders pay 17% SDC on dividends in 2025, reducing to 5% from 1 January 2026. Ensure sufficient retained earnings and proper board minutes authorising the dividend.
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