Filenews 25 May 2024 - by Eleftheria Paizanou
Despite the fact that legislation for years provides for the mandatory submission of tax returns by all taxpayers, regardless of the amount of their income, this arrangement is constantly postponed, through the issuance of a decree by the Council of Ministers.
The decree exempts employees, pensioners and self-employed persons whose annual income does not exceed €19,500* from the obligation to declare income. The exemption is due on the one hand to the upcoming tax reform, which is currently being worked out and which will include an increase in the tax-free amount, and on the other hand to the expected full implementation of Tax For All.
* despite the €19,500 once you have lived in Cyprus for 17+ years you must declare income from savings regardless of your income level and pay defence levy.
The decree for the 2023 tax year was issued early enough so that citizens can proceed with their planning, with the aim of avoiding delays or misunderstandings.
Via taxisnet
This year too, tax filing is done through taxisnet, while with the full operation of the Single Tax Management System of the Tax For All Tax Department, the process will change [probably from next year] and the returns will be submitted through this system.
In the past, it was said that with the full operation of Tax For All, it will be mandatory for all taxpayers to submit returns. However, it was said that it was expected that certain categories of the population would be excluded from filing tax returns.
Excluding tax 130,000
However, for the tax year 2022, 129,580 taxpayers, who had annual incomes of up to €19,500, did not submit tax returns.
Around 170,000 taxpayers with incomes over €19,500 filed tax returns last year (for 2022) and have been taxed. Specifically, 73,172 taxpayers with annual earnings from €19,501 to €28,000. They were taxed at 20% of their income. Another 42,464 taxpayers, earning up to €36,300, have paid 25% income tax, while 43,254 individuals had an annual salary of up to €60,000. They were taxed at 30%.
In addition, around 11,000 taxpayers with incomes over €60,000 have paid 35% income tax.
For tax year 2022, a total of 293,500 tax returns had been filed by the deadline for filing the individual's income return.
In 2021, a total of 134,149 taxpayers with incomes up to €19,500 were exempted from filing tax returns. Another 64,257 taxpayers with incomes up to €28,000. They were taxed with 20% tax and almost 39,000 taxpayers with annual earnings up to €36,300 were taxed at 25%. Income tax of 30% was paid by more than 37,000 taxpayers who had incomes from €36.301 to €60,000. Finally, 10,194 taxpayers with an annual salary of more than €60,000 paid 35% income tax.
The changes made...
It is worth noting that taxpayers will be able to file their tax returns for 2023 until the end of July. Tax returns have some changes compared to previous years, with the aim of implementing the amended legislation. Among other things, changes were made to the fields and codes concerning the deduction of primary employment, based on the Income Tax Law, as amended in relation to the granting of a discount for investment in shares of innovative enterprises.
In addition, fields have been added for the implementation of the Law on the Prevention and Suppression of Money Laundering, according to which the Commissioner of Taxation acts as the supervisory authority of obliged entities.
