North Cyprus has set a new deadline for undistributed corporate profits: applications close at the end of business on 4 December 2026, with the rate and conditions unchanged.
What Is the New Deadline?
Article 2 of Decree Law 120/2026, a decree with the force of law made by the Council of Ministers (the TRNC cabinet) and published in the Official Gazette (Resmi Gazete) on 6 October 2026, requires taxpayers wishing to use Decree Law 88/2026 to apply to the Revenue and Tax Office no later than the close of business on 4 December 2026, a Friday. The scheme covers corporate taxpayers keeping balance-sheet accounts with profits accumulated in retained earnings up to 31 December 2025 (88/2026, Article 4). Dividends paid from those profits to individual shareholders are declared within the filing period, taxed at 7.5% on the assessed base (Articles 5 and 6), and the whole tax is paid up front on the day of declaration (Articles 7(3) and 12). The original fifteen-day period ran to 15 August 2026.
What Changed?
| ITEM | 88/2026 ORIGINAL TEXT | AFTER 120/2026 |
|---|---|---|
| Filing deadline (Article 7(2)) | Close of business on the fifteenth day following the day the decree was passed (15 August 2026) | Changed: no later than the close of business on 4 December 2026 |
| Scope (Article 4) | Profits accumulated in retained earnings up to 31 December 2025 by corporate taxpayers keeping balance-sheet accounts, and the individual shareholders they distribute to | Unchanged |
| Rate (Article 6) | 7.5% on the assessed base | Unchanged |
| Payment (Articles 7(3) and 12) | The whole tax is paid up front to the Office on the day of declaration | Unchanged |
| Loss of entitlement (Article 7(4)) | Entitlement is lost by taxpayers who (A) do not pay the full tax within the payment periods set; (B) prevent assessment and accrual from being carried out properly; (C) take no action within the application period; (Ç) refuse the Office's procedures and create a dispute. They are then assessed under the tax legislation, and tax collected is neither refunded nor offset against other taxes or other years. | Unchanged |
| No re-assessment (Article 8) | Profits taxed under the decree are not re-assessed (yeniden tarhiyat), limited to the dividend amounts distributed | Unchanged |
| No refund or offset (Article 9) | Tax paid by individual shareholders is not refunded or offset against other taxes | Unchanged |
| No aggregation or deduction (Article 10) | The withholding is a final tax; the dividend is not aggregated with other income; the tax paid is not deductible in any tax period | Unchanged |
| Expiry (88/2026 Article 15; 120/2026 Article 3) | 88/2026 lapses on the last working day of December 2026 | Unchanged; 120/2026 lapses with it |
Who Needs to Act?
- For companies keeping balance-sheet accounts: if the 31 December 2025 balance sheet carries undistributed retained earnings, the distribution, the shareholders' declaration and the tax payment must be completed by the close of business on 4 December 2026, with the tax paid up front on the filing day (88/2026, Articles 7(3) and 12).
- For individual shareholders: the declaration rests with the shareholder receiving the dividend (Article 5); the income is not aggregated with other income, and the tax is neither refunded nor offset against other taxes (Articles 9 and 10).
- For those who applied in time under 45/2026 or 88/2026: Decree Law 120/2026 contains no transitional rule for the window that closed on 15 August 2026 and sets no new step for them; nothing in the text requires a fresh application. In practice, this means the new date matters to those who have not yet applied. Background is in our 45/2026 and 88/2026 articles.
- On forms: applications are made on the returns and forms issued by the Office, at the taxpayer's own branch (88/2026, Article 7(1)); whether the Office will publish a separate form or guidance for the new deadline is not yet clear.
- Establish the retained earnings balance in the 31 December 2025 balance sheet.
- Calculate the distribution and the base per shareholder, using the Central Bank of the TRNC effective selling rate of the transaction date for foreign-currency amounts (88/2026, Article 13).
- Pass the distribution resolution through the company's governing body.
- File the returns and forms at your Revenue and Tax Office branch.
- Pay the 7.5% tax up front on the day of declaration.
Please contact N.Akman & Co. to discuss how the new deadline affects your company.
