Pillar Two

What Is Due In Cyprus

• The Cyprus domestic top-up tax applies from fiscal years beginning 31 December 2024 — so 2025 — where the jurisdictional effective rate is below 15%; the substance carve-out reduces the profit that is topped up (✓ L.151(I)/2024 s.12, ✓ Dir. art. 28; L.151(I)/2024 s.54). The income inclusion rule applies from years beginning 31 December 2023 (✓ L.151(I)/2024 s.61).
• The top-up tax information return (T.D.336) for 2025 is due 31 Mar 2027, 15 months after the year end (✓ L.151(I)/2024 s.45(7)). The GloBE notification — or, once made, any change to it — is due by the same date (✓ L.151(I)/2024 s.47). Within 30 days, by 30 Apr 2027, each Cyprus entity owing top-up tax under the income inclusion rule, the UTPR or the Cyprus domestic top-up tax files the top-up tax return and pays (✓ L.151(I)/2024 s.45(7)). For the first years — fiscal years beginning 31/12/2023–30/12/2024 — the Tax Department says a parent entity located in Cyprus files that return even when the top-up tax is nil (✓ L.151(I)/2024 s.45(7)); Helios Lane Software's ultimate parent is outside Cyprus (US), so whether any Cyprus company files a nil return as an intermediate parent is to be confirmed by the practice. The information return may be filed centrally by the group elsewhere, with only a notification in Cyprus (✓ L.151(I)/2024 s.45(7)).
• 2024, the transitional year (✓ L.151(I)/2024 s.57): the information return and the notification were due by 30 Jun 2026, the top-up tax return and payment by 30 Jul 2026. Filings and payments for fiscal years beginning 31/12/2023–30/12/2024 that fell due before 30 November 2026 carry no fines, interest or charges if made by 30 November 2026 — 23 days from today (✓ Pillar II FAQ: 30 Nov 2026).
• Fines on the information return are not imposed for fiscal years beginning on or before 31 December 2026 (but not a year ending after 30 June 2028) where the group shows it acted in good faith to understand and apply the law (✓ L.151(I)/2024 s.49(12)).
• Every transfer pricing adjustment moves the minimum tax: the arm's length figure is the one the computation uses (✓ Dir. art. 16(4)). No adjustment is open on this engagement.

The point for this group. Helios Lane IP Ltd earns the platform royalty with two employees. If its effective rate in Cyprus is below 15% — for example under an IP regime — the Cyprus domestic top-up tax applies, and the DEMPE question in the functional analysis becomes a minimum-tax question too: profit the IP company cannot justify moves to the parent; profit it keeps may be topped up.