Are there set dates for payment of tax, provisionally or in arrears, and what happens with amounts of tax in dispute with the regulatory authority?
The tax year in Cyprus for individuals and companies is the calendar year.
Both individuals and companies must submit a provisional estimate of profits and tax payable for the year by 31 July of the tax year, together with a remittance of half the estimated tax payable. The estimates may be revised at any time before 31 December of the tax year, and the balance of the estimated tax payable must be paid by then.
Individuals who are exempt from the requirement to provide audited financial statements are required to submit their final tax return for the year, with a remittance for any tax payable, by 30 June following the end of the tax year. A further three months is allowed if the return is submitted electronically.
Companies and individuals who are obliged to provide audited financial statements are required to pay the balance of tax due by 1 August following the end of the tax year. The final tax return must be submitted before 31 March of the following year (15 months after the end of the year in question).
Most taxes are payable in arrears except for income tax which provides for advance payment ranging from 75% to 100% depending on the type of entity. Advance payment of income tax is calculated according to the income tax of the previous year. Tax liabilities under dispute are postponed but not in full. By virtue of article 63 of the Code of Tax Procedure, 50% of the total liability is postponed upon the filling of an administrative appeal, under the condition that the remaining 50% is paid.
There are set dates or deadlines for payment of tax following the submission of tax returns. However, if tax payers have doubts in payment of those taxes that they have declared in their tax returns then they have right to submit the tax returns with reservation; but still they have to pay the tax in advance. In such cases, tax payers litigate the tax in dispute and if court renders a favourable decision they are paid back with the interest amount by the Tax Office.
On the other hand, if a tax assessment is made following a tax inspection, then once this assessment is litigated for its annulment, the payment is postponed until the decision of the tax court. If the decision of the tax court is against the tax payer, then payment is inevitable. Yet, if favourable decision is rendered after the appeal, again the tax is repaid with the interest amount.
Depending on the tax at hand, different set dates for payment could apply. For instance, income tax is generally paid by means of an annual tax return that must be filed within the first three months following the end of the fiscal year for which it is being filed. However, taxpayers are also required to file estimated monthly returns relating to income tax due. Concerning value added tax, taxpayers ought to file their corresponding returns on a monthly basis.
In pursuance of the Federal Tax Code, whenever the applicable law does not indicate the relevant tax’s date of payment, it ought to be paid by means of a tax return filed (i) within the first seventeen days of the subsequent month for which the corresponding tax is being paid, in cases where the taxpayer is required to withhold; or (ii) within the next five days after the corresponding tax has been caused for all other cases.
In cases where taxpayers challenge a tax liability before the Tax Administration Service, the payment in dispute is postponed until the corresponding administrative resolution is issued and served to the taxpayer.
Notwithstanding the foregoing, whenever taxpayers challenge a tax liability before the Local or Federal Court of Administrative Justice or any court of the judicial branch, the disputed amount ought to be guaranteed by the taxpayer in order for it not be collected by tax authorities.
In any case, once the tax dispute has been resolved, the winning party is entitled to receive the disputed amount updated to present value as well as interests accrued in connection therewith (interests are accruable for up to five years).
For businesses with taxable profits of up to £1.5m, tax must be paid nine months and one day after the end of the accounting period. Where taxable profits exceed £1.5m, businesses must pay their tax in four equal installments spread over approximately 16 months after the end of a 12 month accounting period. The date for payment of self-assessed income tax is set at 31 January for the tax year ending in April the previous year.
It is possible on application to delay paying tax where the amount is in dispute. However, since 2014, in the case of tax avoidance schemes which are or should have been registered under the Disclosure of Tax Avoidance Schemes (DOTAS) rules HMRC has the power in certain circumstances to require payment of disputed tax in advance of ultimate resolution of the dispute. HMRC exercises the power to require prior payment by issuing an “Accelerated Payment Notice” or “Partner Payment Notice” (APN or PPN) depending on whether the scheme in question involved a partnership (sections 199-233 and Schedule 30-33 Finance Act 2014). The taxpayer has 90 days to object in writing, following which HMRC will confirm, withdraw or amend the notice. There is no right of appeal against the confirmation of an APN or PPN.
For employees, collection of tax is through a ‘Pay-As-You-Earn’ system, which requires the employer to deduct the corresponding tax from salaries and pay this directly to the Income Tax Office. Payment is due by the 15th day of the month following the liability.
Self-employed individuals are required to make two payments on account of tax on 31st January and 30th June of each year.
Companies are required to make payments on account of tax on 28th February and 30th September in each calendar year.
Anybody appealing against the amounts charged can apply to the Commissioner to have postponed all or part of the taxation shown as payable on the assessment (other than that part of the taxation which is not in dispute).
Yes. For example, for corporate taxpayers, corporation tax and consumption tax are due by the date of filing tax returns, i.e., two or three months after the close of the relevant fiscal year. In addition, corporate taxpayers make certain interim tax payments during the relevant fiscal year of corporation tax and consumption tax, which effectively are prepayments of the final tax that will be due by the tax returns for that fiscal year. In addition, withholding tax (which is imposed on certain prescribed types of payments such as remunerations of directors and employees, interest, dividends, etc.) is generally due to be paid by the 10th day of the month immediately following the month in which the subject payment was made.
Even if the taxpayer disputes a tax assessment, in prevailing practice, the taxpayer once pays the assessed tax in advance of the resolution of the dispute. This is because the taxpayer’s objection does not have an effect of suspending the enforceability of the assessment and accrual of delinquency tax; so taxpayers have to pay in advance in order to avoid attachments and other collection enforcement actions and paying delinquency tax. Technically there is a provision to postpone tax liabilities upon a petition to the tax authority, however, in practice, it is very rare that such postponement is granted. The exception to this rule is a transfer pricing assessment; that is, if a transfer pricing assessment is issued and if the taxpayer files an application for a mutual agreement proceeding to resolve double taxation, the payment of the assessed tax will be suspended, upon an application by the taxpayer, until the resolution of the case through the mutual agreement proceeding, subject to provision of security to the government.
Tax is payable in accordance with the schedule set out in the notice of assessment issued to the taxpayer. Once in the system, tax payable in a given year will include any remaining tax payable/refundable for that year as well as a provisional tax purporting to be an estimate of the tax payable by the taxpayer in the coming year.
Once an assessment is issued, it is deemed to be a debt payable immediately to the government, irrespective of any objection or appeal against the assessment. Nevertheless, once an objection or appeal has been filed, the IRD has discretion to hold over part or all of the amounts in dispute as well as agree to other arrangements to secure the debt. It is common for the IRD to request taxpayers to purchase so called ‘tax reserve certificates’ (TRC), which are effectively certificates for funds placed on deposit with the IRD. The purchase of TRCs stops interest from accruing against the taxpayer in the event that the objection or appeal is rejected and it pays the taxpayers interest if the objection or appeal is successful and the money is repaid to the taxpayer.
Taxpayers do not need to pay disputed tax in advance of litigation in cases before the IRS Appeals or the Tax Court. Tax disputes before a federal district court or the Court of Federal Claims must be paid in advance.
In the case of individuals, Personal Income Tax must be paid at the time of filing the tax return, i.e., before the 30 June of the year following the tax period (calendar year) to which it refers.
Companies will also make the payment at the time of filing the Corporate Income Tax return within the 25 days following the six months period after the closing of the tax period to which the return refers to (for most entities, before July 25).
As a general rule, any taxpayer can postpone the payment of taxes under certain circumstances provided that a guarantee is delivered. There are some exceptions where such guarantee is not necessary.
In the event of a dispute, the tax must be paid in advance or, alternatively, a guarantee (typically, a Bank guarantee) should be delivered to the competent tax office, otherwise, the procedure to collect the payment will not be suspended. If such guarantee is delivered to the Tax Authority (and accepted), the tax liability is postponed until there is a final resolution.
Income tax and corporate income tax prepayments are due on 10 March, 10 June, 10 September and 10 December. Trade tax prepayments are due on 15 February, 15 May, 15 August and 15 November. The amount of the prepayment is generally determined on the basis of an income estimation for which the income of the previous years is relevant. Not all taxpayers are, however, obliged to make prepayments.
Generally, appealing a tax assessment does not avoid that the underlying tax becomes due and enforceable. Only in case of a suspension of payment (Aussetzung der Vollziehung), the taxpayer does not have to pay the assessed taxes during the time the appeal is pending. The suspended tax is, however, subject to statutory interest of 0.5% per month (i.e. 6% per annum) during the time the payment obligation is suspended. To the extent the appeal is successful and the tax is eventually reduced, no interest has to be paid.
Corporate taxpayers must make prepayments during the year corresponding to their estimated tax liability for that year. For corporations with an accounting year similar to the calendar year, prepayments must be made on or before April 10th, July 10th; October 10th and December 20th.
Failure to make prepayments subjects the taxpayer to a non-deductible surcharge. The surcharge is calculated on the basis of the total corporate income tax less the withholding taxes that can be credited against the corporate income tax. For accounting year 2016, the surcharge rate applicable on the underlying tax due is equal to 1.125%. The surcharge for insufficient prepayments does not apply in the case of small and medium-sized companies (‘SMEs’, see point 15 below for a definition) for the first 3 years after the company’s establishment.
The tax is assessed based on the tax return filed by the taxpayer. As a general rule, the assessment must be sent to the taxpayer no later than June 30th of the year following the assessment year. The assessment year corresponds to either the year following the accounting year if the accounting year coincides with the calendar year, or the calendar year if the accounting year does not coincide with the calendar year. On the basis of the data included in the annual corporate income tax return, the tax inspector verifies whether the prepayments of corporate income tax were sufficient. In the case of failure by the taxpayer to file a formally valid, accurate and timely return, the statute of limitation provides for a 3-year term, starting on the first day of the assessment year, for the tax authorities to make an assessment. The term of 3 years is extended to 7 years in the case of fraud.
Corporate income tax (IRES) and regional tax on productive activities (IRAP) prepayments are due on 30 June and 30 November. The amount of the prepayment is generally determined on the basis of an income estimation grounded on the previous year income. Not all taxpayers are, however, obliged to make prepayments.
Generally, appealing a tax assessment does not avoid that the underlying tax becomes due and enforceable. Only in case of a suspension of payment, the taxpayer does not have to pay the assessed taxes whilst the appeal is pending. In case the appeal is not successful, the full tax, the penalties and the interest become due again.
Notwithstanding a tax appeal, all taxes including disputed taxes must be settled in full within 30 days upon the issuance of the tax assessments. In most cases, the Inland Revenue Board of Malaysia may exercise administrative concession and grant taxpayers a 6 to 24 month installment period to settle their taxes. There is no provision under the existing tax laws to postpone tax liabilities under dispute.
Ireland operates a self-assessment tax system and has set dates for payment of taxes. For income tax, payments of tax and the filing of tax returns must be completed by 31 October each year and can be done online. For capital gains tax (CGT), tax is due on 15 December each year for disposals of assets between 1 January and 30 November that year, and by 31 January in the following year for disposals between 1 December and 31 December the previous year.
Corporation tax is usually paid on a preliminary basis with a balancing figure payable when the final return is filed. The precise dates for payments of tax depend upon whether the company is a small company or not. A “small company” , which is a company whose corporation tax liability in the preceding accounting period does not exceed €200,000 must, in the penultimate month of its accounting period, must pay preliminary tax of the lower of 90% of its current year final tax liability or 100% of its corporation tax liability for the preceding accounting period. “Non-small companies” must pay preliminary tax in two installments; the first installment is payable in the sixth month of the accounting period or 45% of the current accounting period. The second installment is payable in the eleventh month of the accounting period and must bring the total amount paid to 90% of the corporation tax liability for the current period. Any remaining corporation tax must be paid within 9 months of the end of the accounting period.
In the event of a dispute over a tax liability, there is generally no requirement to pay tax in order to take an appeal although if tax is not paid interest and penalties can accrue while the appeal is being litigated should the taxpayer ultimately be unsuccessful. Taxpayers may pay the disputed tax in order to mitigate interest and penalties. An exception to this is stamp duty which must be paid before an appeal is taken.
Further to a tax reassessment, and once he receives a tax collection notice (“Avis de mise en recouvrement”), a taxpayer must pay the whole amount of reassessed tax including penalties and interest for late payment.
If the taxpayer decides to go court, payment of the reassessed tax may be deferred until the end of the first level of the court proceedings provided that the taxpayer secures the payment and provides the FTA with financial guarantees.
If the court rules in favour of the taxpayer, the FTA will repay the amount paid initially by the taxpayer increased with a monthly 0.4% interest for late payment (4.8% per year) if the taxpayer choose to pay or have to refund the cost of the guarantees if the taxpayer asked for a deferral.
If the court rules in favour of the FTA, the payment of the reassessed tax including penalties and interest for late payment (same rate of 4.80% per year) becomes final and the taxpayer must proceed to payment if he asked for a deferral.
Please note that the mutual agreement procedure (“MAP”) that aims at eliminating double taxation and which is provided for in tax treaties and the EU arbitration convention cannot benefit of a deferral of payment (this is in contradiction with EU code of conduct on the arbitration convention of December 2009).
Income tax only becomes due and payable when the Commissioner of Taxation makes an assessment of your income for the year. As an assessment is deemed to be made upon lodgement of the relevant return, this means that for most entities, income tax will be due or payable 21 days after the day they lodge their tax return.
The standard tax year in Australian ends on 30 June each year. For most entities adopting this standard reporting period, their income tax return will be due by 31 October.
The payment of a single, annual tax liability may present a considerable risk to liquidity and an unacceptable risk to tax revenues if certain taxpayers do not adequately account for their tax liabilities throughout the year. To prevent these situations arising, the tax system imposes an obligation on certain taxpayers to pay their anticipated tax liability by way of monthly, quarterly or annual instalments. The regime only applies to those taxpayers that earn business and or investment income over certain thresholds and if the Commissioner notifies the taxpayer of an instalment rate. The taxpayer is still required to lodge a tax return at the end of the income year with the instalments amounting to a credit to offset the actual tax liability incurred.
Reporting, for fringe benefits tax purposes, operates on annual basis ending each 31 March with returns usually due by 21 May in the following year of tax.
Goods and services tax generally operates on a quarterly basis, ending each 30 June, 30 September, 31 December and 31 March. In most cases, the relevant return (known as the BAS) is due on the 28th day of the next calendar month. Although, the BAS for the tax period ending 31 December is due on 28 February. Payment of liabilities reported in the BAS are due at the same time as the return is lodged.
The Commissioner has the power to grant an extension of time for the payment of tax liabilities. The ATO has released some non-binding guidelines concerning the exercise of the discretion to grant an extension of time (eg in cases where payment cannot be made due to circumstances outside of the taxpayer's control).
The mere fact that a taxpayer disputes an amount of assessed tax (either through the objection process or through the Courts) does not defer the due date for the payment of tax. The taxpayer will need to rely on the exercise of the Commissioner's discretion discussed above to defer the payment. As an exercise of an administrative discretion, it will be subject to judicial review. Accordingly, a refusal to extend the due date for payment cannot be unreasonable. Further, a tax liability creates a debt which are enforced in the courts of law. A feature of this enforcement mechanism is that a taxpayer may be able to petition the court to stay proceedings for the recovery of the tax obligations. Even where there is a genuine dispute before the Courts about the correctness of an assessment, the Commissioner is generally successful in arguing that those proceedings should not prevent recovery of the tax – the Courts accepting the scheme of the Australian tax legislation that gives prima facie validity to the assessment and prioritises recovery of the tax.
The Commissioner does offer administrative arrangements which can permit the taxpayer to pay tax liabilities by instalments or enter into '50/50 arrangements' for disputed tax debts.
Under a 50/50 arrangement, the taxpayer must agree to pay all undisputed tax liabilities, 50% of the disputed tax debt and cooperate fully with the ATO in providing any requested information. In return the Commissioner agrees to defer payment of the unpaid balance of the disputed debt and its related components (eg penalties and interest) until 14 days after the decision in the objection, tribunal or court proceedings determining the dispute. The Commissioner will also remit 50% of the general interest charge that would otherwise accrue in the event the taxpayer is unsuccessful in their dispute proceedings.
Generally taxpayers do not need to pay disputed tax in advance of litigation in cases before the cantonal and federal courts, except for the Federal Supreme Court.