Penalties and interest relief on overdue taxes

On 7 February 2020 the Cyprus government passed a new Law providing significant reliefs (from 50% up to 95%) on interest and penalties on overdue taxes including income tax, VAT, special defence contribution tax, capital gains tax and stamp duty, depending on the number of instalments chosen for settlement of the overdue taxes.

Under this new Law taxpayers (individuals and companies) will be eligible to apply provided that the Income Tax Declarations, up to and including the tax year 2015 are filed by 30 June 2020 and the taxpayer is compliant with subsequent tax obligations (including VAT) at the time the application is made.

The new Law also provides that if a taxpayer has paid off its tax liabilities for tax years up to 2015 without benefiting from the relevant relief, a written request could be submitted to the Commissioner of Taxation claiming a refund on those amounts.