TaxLegi 30.06.2026

Payment of temporary tax for 2026

As per the Assessment and Collection of Taxes Law, every company or individual (who derives income other than from emoluments), must pay temporary tax estimated on the taxable profit for income tax purposes, for the same tax year. 

1.      The temporary tax on such taxable profits is payable in two equal instalments as follows by: 

-          31^st of July 2026; and 

-          31^st of December 2026. 

If the tax is not paid before the end of the month following the month the instalment is due (i.e. 31^st of August 2026 and 31^st of January 2027, respectively for each instalment), interest is payable at the rate in force which currently is 3,50% per annum. Interest is calculated on the basis of completed months of delay.

2.      Furthermore, failure to pay the due tax by 31^st of July and 31^st of December will result in a monetary charge of 5% on the tax due for each instalment (in addition to the 3,50% per annum interest). However, in practice the imposition of the 5% monetary charge will be made only if the tax is not paid by the end of the following month to which it relates (i.e. 31^st of August 2026 and 31^st of January 2027 respectively for each instalment). 

3.      The estimate of chargeable income may be revised (upwards or downwards) at any time before 31^st of December 2026:

(i)      If the estimate is revised upwards, interest is payable in the difference between the revised amount payable for each instalment due and the amount initially declared and paid. The interest is calculated for each completed month of delay for the period the instalment was due (e.g. if a revised estimation is prepared in September, the interest will be imposed only for the 1^st instalment for one complete month).

(ii)    If the estimate is revised downwards, the minimum amount that can be declared as temporary tax should be equal to the amount of the previous payment made (i.e. 1st instalment declared). 

4.      It should be noted that, when calculating the estimated taxable income for the year 2026, any applicable changes arising from the Cyprus tax reform and the new tax legislation should be taken into consideration.

5.      If the estimated chargeable income (as finally may be revised) is less than 75% of the actual chargeable income as this will be declared on the submitted income tax return for the year (Form TD4), then there will be an additional tax of 10% on the tax due. 

6.      Any tax due (including any additional tax of 10%) for the year 2026 is payable by 31^st of January 2028 (i.e., by the submission deadline of the income tax return). 

7.      Effective from 1^st of January 2026:

(i)      in the case of a company incorporated and registered in the Republic, or of a company incorporated outside the Republic and registered under the Companies Law or which has become resident of the Republic; and

(ii)    in the case of an individual who has began to earn income other than remuneration,

After 30^th of June, must pay temporary tax estimated on the taxable profit for income tax purposes in a single installment payable by 31^st of December.

Payment of 2025 Final Corporate Income Tax and 2026 Provisional Tax installments can only be made via the Tax Portal System

The payment of the provisional tax (Code 200) for 2026 and final income tax (Code 300) for 2025 can only be made via the Tax Portal  (https://taxportal.mof.gov.cy/), provided that the relevant tax liability has been created. 

In addition, any payments that are subject to interest and penalties or relating to revised provisional tax can be made through the Tax Portal, on the same proviso as above.   

Repercussions for late payment of tax by Companies and Self-Employed individuals with an obligation to prepare financial statements for the year 2025. 

1.      Any tax due (including any additional tax of 10%) for the year 2025 is payable by 1^st of August 2026. If payment is not made by 31^st of August 2026, interest will accrue at the applicable rate in force (currently 3,50% per annum) as from 1^st of August 2026 on the basis of completed months of delay. 

2.      Furthermore, failure to pay the outstanding balance in respect of the 2025 income tax by 31^st of August 2026 will result in a fixed monetary charge of 5% on the tax due (including any additional tax of 10%). In addition, any outstanding tax (as this is declared on the income tax return) is subject to an additional monetary charge of 5% in case this is not paid within 60 days after the last day of the deadline for the payment of the relevant tax liability for that specific tax year (i.e. failure to pay for tax year 2025 by 1^st of October 2026 will result to an additional 5% monetary charge).  

For additional information with respect to this Alert, please contact the following:

Philippos Raptopoulos

Partner, Head of Tax and Legal Services

Tel: +357 25 209 740

Philippos.Raptopoulos@cy.ey.com

Petros Liassides

Partner, Direct Tax

Tel: +357 22 209 797

Petros.Liassides@cy.ey.com

Myria Saparilla

Partner, Direct Tax 

Tel: +357 96 795 037

Myria.Saparilla@cy.ey.com

Glykeria Terpizi
Senior Manager, Direct Tax

Tel: +357 25 209 716

Glykeria.Tepizi@cy.ey.com

·         On 15 June 2026, the Cyprus Tax Department issued an announcement clarifying the central filing mechanism, notification requirements and compliance deadlines for the first reporting fiscal year under Cyprus Pillar Two legislation, in addition to waiving administrative penalties for filings and payments made by 30 September 2026 in respect of notifications or returns or payments that are due before 30 September 2026.

·         Multinational enterprise groups (MNE Groups) within scope may elect central filing for fiscal years beginning between 31 December 2023 to 31 December 2024, allowing a single Top-Up Tax Information Return (TTIR) to satisfy local filing obligations if filed in Cyprus or another qualifying jurisdiction, subject to notification requirements.

·         Key deadlines include submission of the TTIR and related notifications within 18 months from fiscal year-end or by 30 June 2026 (whichever is later), with Income Inclusion Rule top-up tax returns and payments due within 30 days thereafter; revised returns are permitted within specified timeframes.

·         The measures align Cyprus with OECD and anticipated European Union administrative frameworks and reduce duplicative reporting; MNE groups with operations in Cyprus should evaluate whether to elect central filing, in addition to assessing relevant filing obligations and payment deadlines.

Executive summary

On 15 June 2026, the Cyprus Tax Department (CTD) issued an announcement clarifying the operation of the central filing mechanism, the applicable notification requirements and the compliance deadlines for the first reporting fiscal year under the Cyprus Pillar Two legislation (Law 151(I)/2024). As part of the announcement, the CTD waived the imposition of administrative penalties for certain filings and payments due by 30 September 2026.

This development is expected to reduce duplicative reporting obligations and align Cyprus with the Organisation for Economic Co-operation and Development (OECD) administrative framework for Pillar Two compliance.

Cyprus is a signatory to the OECD Multilateral Competent Authority Agreement (MCAA), which facilitates the central filing and automatic exchange of Global Anti-Base Erosion (GloBE) Information Returns (GIRs) between participating jurisdictions. Cyprus is also expected to transpose DAC9, the European Union (EU) Directive on Administrative Cooperation, enabling central filing of a Top-Up Tax Information Return (TTIR) with EU Member States.

A recent FAQ issued on the Pillar Two Directive clarified that all EU Member States should treat Cyprus as having a qualified IIR in effect; that Cyprus can receive top-up tax information returns as of 31 May 2026; and that Cyprus is committed and obliged under EU law to exchange information under DAC9 with other Member States in time for the first exchange deadline. If an MNE opts to file its top-up tax information return centrally in Cyprus, other Member States should not require domestic filing at that time, in line with DAC9.

Main points covered by the announcement

Multinational Enterprise (MNE) Groups

The CTD has clarified that MNE Groups within the scope of the Cyprus Pillar Two Law may elect to use the Central Filing Mechanism provided under Article 45(3) of the Cyprus Pillar Two legislation (the Law) for fiscal years beginning between 31 December 2023 and 31 December 2024.

Central filing — key points

MNE Groups may submit the Top-Up Tax Information Return (Form T.D. 336) (TTIR) in Cyprus if the Ultimate Parent Entity (UPE) or the Designated Filing Entity is located in Cyprus. In such a case, the filing obligation of all other Cypriot Constituent Entities is deemed fulfilled. The TTIR corresponds to the GIR contemplated under the OECD framework.

Alternatively, if the TTIR is submitted in another EU Member State, or in a third country (excluding Turkey) that is included in the OECD Common Understanding list dated 18 May 2026, the filing obligation of Cypriot Constituent Entities for a TTIR is deemed fulfilled, provided the relevant notification requirement is met. (For background, see EY Global Tax Alert, OECD releases common understanding on GIR central filing and updates to Administrative Guidance under Pillar Two, dated 20 May 2026.)

The CTD also clarifies that, if an MNE Group does not elect for the Central Filing Mechanism, either:

·         each Cypriot Constituent Entity is generally required to submit a TTIR in Cyprus; or

·         a Designated Local Entity may be appointed to file the TTIR on behalf of all Cypriot Constituent Entities.

Revised TTIRs may also be submitted in accordance with Article 50(1)(a) of the Law.

Relevant filings and deadlines

Top-Up Tax Information Return (Form T.D. 336)

Form T.D. 336 should be submitted within 18 months from the last day of the reporting fiscal year, or by 30 June 2026 (whichever is later) — i.e., 30 June 2026 for a financial year ended 31 December 2024.

Revised TTIR

If Cyprus is the filing jurisdiction, the UPE or Designated Filing Entity may submit a revised TTIR that covers all Cypriot Constituent Entities.

If central filing occurs abroad, Cypriot Constituent Entities are relieved from filing a revised TTIR locally.

TTIR notification

If the TTIR is submitted in another EU Member State, or in a third country:

·         each Cypriot Constituent Entity must notify the CTD, via the “Notification Filed by a Constituent Entity” (Form T.D. 331), providing the name and Taxpayer Identification Number of the entity that submits the TTIR and the name of the jurisdiction in which it is located; and

·         if a Designated Local Entity in Cyprus files on behalf of all Cypriot Constituent Entities, only the “Notification by a Designated Local Entity” (Form T.D. 333) is submitted.

Pillar Two registration / notification

Each Cypriot Constituent Entity or Joint Venture must file the “Constituent Entity Notification” (Form T.D. 332), unless a Designated Local Entity in Cyprus files on behalf of all Cypriot Constituent Entities, in which case only the “Designated Local Entity Group Notification” (Form T.D. 334) is submitted.

Entities must notify the Tax Department of any changes regarding previously submitted notifications. Notification is also required if either:

·         an entity ceases to be part of the Group; or

·         the MNE Group falls outside the scope of the Law.

The relevant forms (Forms T.D. 331, 332, 333 or 334) should be submitted within 18 months from the last day of the reporting fiscal year, or by 30 June 2026 (whichever is later).

IIR Top-Up Tax Payable Return (Form T.D. 335)

A Cypriot parent entity liable for top-up tax must submit the “Income Inclusion Rule Top-Up Tax Due Return” (Form T.D. 335) within 30 days from the TTIR deadline. The return must be submitted even if the tax payable is nil.

Payment of top-up tax must also be made within 30 days of the TTIR deadline.

Revised IIR Return

A revised Form T.D. 335 may be submitted within the latest of:

·         18 months from fiscal year-end;

·         30 June 2026; or

·         30 days from submission of a revised TTIR.

In general

All notifications and returns are submitted via the Tax For All (TFA) portal, either by the Constituent Entity or by an authorised representative with an active TFA account.

Non-application of administrative penalties

The CTD announcement further states that, if notifications, returns or payments which are due before 30 September 2026 are filed and any top-up tax due is paid by 30 September 2026, no statutory administrative fines, interest or surcharges shall be imposed. In effect, this means that for financial years ended 31 December 2024 — for which notifications are due by 30 June 2026 and returns or payments are due by 30 July 2026 — no statutory administrative fines, interest or surcharges will be imposed if filing and payment are made by 30 September 2026.

Implications

MNE Groups should determine whether to apply the central filing mechanism, and Groups relying on the central filing mechanism should ensure that notification obligations are still fulfilled in Cyprus.

In addition, Cypriot parent entities subject to the IIR should assess the relevant filing obligations and payment deadlines.

For additional information, please contact our team:

Eleni Papachristodoulou

Partner – International Tax and Transaction Services

Phone: +357 22 209 770

Eleni.Papachristodoulou@cy.ey.com

Elena Christodoulou

Manager - International Tax and Transaction Services

Phone: +357 22 051 620

Elena.Christodoulou1@cy.ey.com

The Council of Ministers has issued Decree 260/2026, exercising the powers conferred on it by Articles 5(1A) and 13(1) of the Assessment and Collection of Taxes Laws of 1978 to (No. 2) of 2025. The Decree, which was published in the Official Gazette of the Republic on June 12, 2026, extends the deadline for submitting the 2025 personal income tax return, as well as the deadline for paying the tax due based on that return, for individuals who are not self-employed or required to prepare audited or reviewed accounts. The extended deadline is October 31, 2026.

For additional information with respect to this Alert, please contact the following:

Petros Liassides, Partner, Direct Tax Services, Petros.Liassides@cy.ey.com

Herodotos Hadjipavlou, Senior Manager, People Advisory Services Tax, Herodotos.Hadjipavlou@cy.ey.com

Michalis Karatzis, Director, People Advisory Services Tax, Michalis.Karatzis@cy.ey.com

Maria Varvatsi, Assistant, People Advisory Services Tax, Maria.Varvatsi@cy.ey.com

We would like to inform you that the Annual Employer’s Return (“Form T.D.7”) for the tax years 2025 and 2026 is now available for submission through the Tax For All (“TFA”) platform. The deadline for filing the annual 2025 Form T.D.7 is 30 September 2026, while the deadline for filing the annual 2026 Form T.D.7 is 31 May 2027.

Furthermore, we would like to remind you that, in accordance with an official announcement issued by the Tax Department on 26 January 2026, the obligation to file twelve (12) Monthly Payroll Returns and the Annual Form T.D.7 applies only to employers who, on a monthly basis, withhold and pay to the Tax Department Income Tax, and/or employee GeSY contributions, and/or employer GeSY contributions.

The Monthly Payroll Returns need to be submitted as part of the process of paying withholding taxes and GeSY contributions.

Employers with employees and/or officers (Directors/Secretaries) remunerated for their services, but without any withholdings (Income Tax and/or GeSY contributions), are required to submit at least one Monthly Payroll Return as well as an Annual Form T.D.7 for the relevant tax year.

EY Cyprus remains at your disposal for any information and/or clarifications required.

For additional information with respect to this Alert, please contact the following:

Petros Liassides, Partner, Direct Tax Services, Petros.Liassides@cy.ey.com

Herodotos Hadjipavlou, Senior Manager, People Advisory Services Tax, Herodotos.Hadjipavlou@cy.ey.com

Michalis Karatzis, Director, People Advisory Services Tax, Michalis.Karatzis@cy.ey.com

Maria Varvatsi, Assistant, People Advisory Services Tax, Maria.Varvatsi@cy.ey.com

According to the latest official announcement issued by the Tax Department (Τμήμα Φορολογίας | Ανακοινώσεις) and pursuant to Article 48A of the Assessment and Collection of Taxes Law (Law 4/1978), as amended following the recent tax reform, with effect from 1 July 2026, rent payments relating to immovable property located in Cyprus must be made exclusively through:

• bank transfer; or
• payment by debit or credit card; or
• any other recognized electronic means of payment. 

This requirement applies to all natural and legal persons, irrespective of the amount of rent and the nature of the use of the property. In this respect, recipients of rental income relating to immovable property situated in Cyprus are not permitted to accept rent payments in cash or through any other non-electronic means and must comply with the prescribed payment methods.

EY Cyprus remains at your disposal for any information and/or clarifications required.

According to Tax Circular (02/2026) issued by the Cyprus Tax Department on 29 May 2026, an alternative method for the imposition of the Special Defence Contribution (“SDC”) on dividend and interest income has been introduced for individuals.

The alternative regime provides eligible individuals (those who do not have a Cyprus domicile of origin and who are expected to become domiciled in Cyprus under the 17-out-of-20-year rule), the option to elect for a fixed SDC liability. Under this option, eligible individuals may choose to make a lump-sum payment covering a five-year period (with the possibility to extend for an additional five-year period), instead of being subject to SDC on their actual dividend and interest income.

In particular, eligible individuals may apply to be subject to this alternative method by paying, upon approval of their application by the Tax Commissioner, a lump sum of €250.000, equivalent to €50,000 per annum for a period of five consecutive tax years. The election applies to a five-year period commencing from the tax year in which the eligible individual becomes domiciled in Cyprus.

Transitional provisions apply for individuals who became domiciled in the 2024 or 2025 tax years, allowing them to opt into the regime for the period 2026–2030, provided that their application is submitted by 30 June 2026.

Applications must be submitted no later than 30 June of the first year of the relevant five-year period. Notably, individuals may also submit their application up to two years in advance of the year in which they are expected to become domiciled in Cyprus.

EY Cyprus is at your disposal for any information and/or clarifications required.