Introduction

Further to our previously issued Tax Alert in relation to tax forms T.D. 602 and T.D. 603, we would like to inform you that through an announcement issued on 4 May 2021, the Tax Department provides further details regarding the new forms for SDC and GHS withheld on interest and dividend payments.

The below forms are accessible through the Taxisnet portal and through the account of each Taxpayer as follows:

1. Form T.D.602 – SDC and GHS withheld on interest paid.

2. Form T.D.603 – SDC and GHS withheld on dividends paid.

➢ Who has the obligation to submit such forms?

Any taxpayer who has or had the obligation to withhold SDC and GHS contributions, on interest/dividends declared from 1 January 2019 onwards, is obliged to electronically submit forms T.D.602 and T.D.603.

Should the taxpayer wish, they may grant access to their authorised representative / tax consultant, enabling them to complete and submit the said forms to the Tax Department on their behalf.

➢ What is the deadline for these forms to be submitted?

• Forms relating to the period January 2019 until December 2021 shall need to be electronically submitted by 31 January 2022.

• Forms relating to the month January 2022 and onwards shall need to be electronically submitted by the end of the month following the month in which the withholding was made (i.e. the deadline is the

same as the due date of the payment of SDC and GHS contribution withheld).

➢ When should the payment of withheld SDC and GHS be made?

As noted above, the payment of SDC and GHS is due by the end of the month following the month in which the SDC and GHS contribution were withheld.

It should be noted that in case the payments have already been made, these should be reflected automatically in the forms T.D.602 and T.D.603. In case the SDC and GHS contribution is due after the electronic submission of the forms T.D.602 and T.D.603, the relevant liability should be automatically created and reflected in the tax portal system. The payment of the relevant liability can be made via online banking from a Cypriot bank account, or JCC Smart application/website or wire transfer from a foreign bank account.

Additional information:

o The taxpayer has the right to submit multiple forms for the same tax year. The submission of an additional form does not overwrite the prior submitted tax return but rather represents a

supplementary declaration (e.g. in case a company made 3 separate dividend declarations during 2020 for different months, then 3 separate T.D.603 forms shall need to be submitted via Taxisnet).

o Forms T.D.602 and T.D.603 can accept negative amounts in relation to prior payments, for which there are grounds for correction, provided that the statute of limitation of 6 years has not elapsed from the withholding date.

o The penalty for failure to submit the relevant forms within the due date will amount to EUR 100 for each form that ought to have been submitted. In addition, in case of delay in payment of SDC and GHS contribution due, a penalty equal to EUR 100 and a flat 5% penalty on the amount due is imposed. Interest is also imposed based on the official rate set by the Minister of Finance calculated based on completed months (the official rate as of 1.1.2020 being 1,75%).

How can we help you?

EY Cyprus can assist taxpayers with the completion and electronic submission of forms T.D.602 and T.D.603 to the Tax Department together with any additional calculations that may be connected with these forms.

EY Cyprus remains at your disposal for any information and/or clarifications required.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.