Tuesday, 10 July 2012 08:41

Information about temporary tax assessment 2012

Dear Clients and Associates,

According to the Inland Revenue legislation, each company needs to estimate its final taxable income for the current year by 1 August and pay three equal installments on the estimated tax at the following dates:

1. 1st August - current year
2. 30th September - current year
3. 31st December - current year

If the Company fails to do so by submitting the IR6 declarations and its operations result in a taxable profit, then the company will pay a 10% penalty on the assessed tax plus interest (thus result in an effective tax rate of 11% instead of 10%). In addition, if the estimated tax is lower than 75% of the actual tax, this 10% penalty is applicable on the difference (between actual tax and 75% of the actual tax). If for example the estimated tax is 1.000 euros and the Company pays three equal installments of 333.33 euros, but the actual tax comes out to be 1.500, then there is a penalty of [(1.500*75%)-1.000]*10% = 12.5 euros. Revision of the estimated tax is allowed only up to 31 December of the current year.

In addition and based on the recent amendments of the income tax legislation, if you fail to submit the Provisional Tax returns by the due dates stated above it will result to an interest rate of 5% per annum from the original due date, on a complete month basis, plus a penalty of 5%.

It is important to note that NIL returns need not to be submitted. The Income Tax Office however does accept the submission of NIL tax returns from individuals but not for legal entities.

If you would like us to assume responsibility for the preparation of the return and administration of its submission and related payments please get in touch with us by 20 July 2012 to make the necessary arrangements.

Our fees for the above are:
1. Preparation, submission and administration of payment of the Provisional Tax return with taxable income: Euros100-150, depending on the involvement required by us for estimating taxable income.

We will consider no reply to this newsletter by 20 July 2012 as an assumption by you of the responsibility to comply with this obligation. We do not commit to the same prices for any requests in relation to this matter after that date.

We kindly request your understanding in this.