Imposition of 10% Additional Tax on Employees with income other than employment remuneration
Interpretive Circular 54 (available only in Greek language) issued by the Cyprus Tax Department on 19 October 2021, concerns the imposition of 10% additional tax for employees with income other than emoluments from employment.
10% additional tax
As per the said Circular and the applicable Law provisions, where the estimated chargeable income which is declared (relevant declaration TD5 must be filed) twice during a tax year, is less than 75% of the actual final chargeable income, additional 10% tax should be imposed.
The said declaration (in parallel with the settlement of the respective tax liability, where applicable) must be filed twice a year in July and December, even in cases where employees inform their employers about such other additional incomes (e.g. rental income) and relevant taxes are withheld and settled by the employer.
Type of Income Tax Return: Employee vs Self-Employed
The said Circular also clarifies that Employee Income tax Returns should be submitted only by those persons with employment remuneration in excess of the other incomes, otherwise Self-Employed Income Tax Return should be submitted.
How can we help?
Our tax department stands ready to assist you ensuring compliance with the above requirements. In case income (other than employment remuneration) is anticipated/earned during a tax year, feel free to contact us in due course to provide assistance with the settlement and filing of the relevant declaration, in July and December.