MARCH 2026 NEWSLETTER - TAX PENALTIES

MARCH 2026 NEWSLETTER - TAX PENALTIES
23/03/2026
NEWSLETTER 3/2026
Tax Penalties
Key Update
Following the Cyprus Tax Reform effective from 1 January 2026, the Tax Department has introduced stricter administrative penalties for tax non-compliance.
Summary of the key penalties introduced
1. Late Filing of Tax Returns
Administrative fines apply for late submission of tax returns or supporting documents:
  • Individuals: €150
  • Small companies (turnover below €1 million): €250
  • Large companies (turnover above €1 million): €500
If the taxpayer does not comply after receiving a formal notice from the Tax Commissioner, the penalties increase to:
  • Individuals: €300
  • Small companies: €500
  • Large companies: €1,000
2. Late Payment of Taxes
  • 5% penalty on unpaid tax after the due date
  • Additional 5% surcharge if the tax remains unpaid after two months
  • Statutory interest will also apply on the outstanding amount
3. Failure to Maintain Accounting Records or Submit Employer Returns
Failure to maintain accounting records:
  • €300 for entities with turnover up to €1 million
  • €1,000 for entities with turnover above €1 million
Failure to submit employer returns (TD7):
  • €300 for entities with turnover up to €1 million
  • €1,000 for entities with turnover above €1 million
4. Incorrect or Missing Information
Higher penalties may apply for serious violations, including:
  • €5,000 fine for unjustified omission of income in a tax return
  • €5,000 fine for failure to issue proper invoices or receipts
  • €6,000 fine for refusal to accept card payments where required
AuditLine Limited | Assurance and Tax Advisory Services
Address: 12 Kennedy Avenue, 4th Floor, 1087, Nicosia, Cyprus
P.O. Box: 25203, 1307, Nicosia, Cyprus
Phone: +357 22 653367
Fax: +357 22 653368
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.
Published in Business

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