On 3 October 2019, the Cyprus tax department has published corporate income tax return form (TD4) for 2018. The basic difference between 2018 and 2017 return form is the part 3. Under this taxpayer is requested to confirm whether a Transfer Pricing Study (“TP Study”) has been prepared to support the taxpayer’s position or whether the taxpayer has followed the safe harbour rules as in case of involved in intra-group financing arrangements (i.e. relating to loans financed out of debt) mentioned in the Interpretative Tax circular 3 (No: 05.13.001) issued by the Cypriot Tax Department on the 30th of June 2017.
The return for 2018 must be submitted electronically via the TAXISNET portal. Based on current legislation, the income tax return must be submitted in 2018 by March 31, 2020. If the tax return is not submitted by the due date, a lump sum penalty of € 100 will apply. A penalty of € 200 will apply if the return is not submitted within the period requested by tax department. For companies, a person will be fined up to € 17 per day for as long as the failure continues or for a maximum of 12 months or both.
