Tax Department issued a circular on 14 November 2017 to clarify an important part of the law.

​

In effect, the benefit, which is deemed to be granted to directors or shareholders who are individuals or their spouses or their relatives up to the second degree of kindred who are not tax residents in the Republic, will be calculated on the whole year, irrespective of their period of stay in the Republic of Cyprus. 

​

Consequently, if that benefit is above the €19.500 tax free amount, non Tax resident directors or shareholders who are individuals or their spouses or their relatives up to the second degree of kindred have an obligation to register and submit an Income Tax Return in Cyprus in order to declare that benefit in Cyprus.

​

This fact came into effect for accounting periods commencing at 2018 onwards only.