The Cyprus month, ordered by deadline
| When | What | Payment involved |
|---|---|---|
| 15th of the following month | VIES filing | no |
| End of the following month | payroll tax filing | no |
| Last day of the following month | social insurance | yes |
| 10th of the second month after quarter end | VAT return | usually yes |
| 31.07. and 31.12. | provisional tax | yes |
The right-hand column is the most important one. Two of the deadlines hang on no payment, and those are exactly the ones that slip.
The five steps
1. Write all sales invoices in full. Not just the paid ones, the open ones too. For VAT the invoice counts, not the payment received.
2. Match purchase receipts. Every payment out needs its receipt, and now, while it is still possible to remember what it was.
3. Reconcile the bank account. Match every movement to a transaction. Whatever is left over is either a missing receipt or an error.
4. Check the VAT rates on each line. For customers in other EU states, the VAT identification number decides whether you charge with or without VAT, see the guide to reverse charge.
5. Hold it against the tax estimate. The step almost everybody leaves out.
Why step five is the most important
Provisional tax requires an estimate of the year’s profit. If it falls below 75 % of the profit later assessed, a surcharge of 10 % applies, and it is measured on the tax, not on the difference.
That estimate can only be made if you know the running profit. Anyone estimating in July without having closed the first six months is guessing. Details in the guide to provisional tax.
31 December is the last opportunity to raise the estimate. A close in November is therefore worth more than one in January.
Know your own quarter ends
The VAT periods are allocated at registration. They are not the same for everybody.
Two Cyprus companies can have different quarter ends and therefore different filing deadlines. Taking a deadline from a business partner or from a general overview is the most common way to miss your own. Where to look it up is in the guide to Tax For All.
What the monthly close saves later
The annual accounts are the sum of the twelve months.
If they were kept as you went, the accounts are a compilation. If they were not, they are a reconstruction: for every receipt it has to be worked out after the fact what it was, and every gap becomes a query. That costs many times the ongoing work at the auditor or accountant, and it costs it again every year.
That a company with no activity also needs accounts is in the guide to the dormant company.
What we could not substantiate
- Whether the VAT deadline is the 10th of the second following month without exception. Another source describes it as 40 days after the quarter end. Both usually lead to the same day, but not always.
- Whether the same deadlines apply to a nil filing. For the payroll tax filing one source describes a duty even with no withholding; for VIES with no intra-Community supplies we found no clear statement.
All the annual dates side by side are in the overview of tax deadlines.
Bookkeeping: the close as a review
A monthly close takes half an hour if the figures are already there, and a day if they first have to come into being.
In Volk Accountant the reports show the running profit, Banking the unmatched payments and receipt capture the outstanding receipts. VAT 4 and VIES come out of the same books, without anybody transferring figures.