Cyprus Law for Settlement of Taxes : Early in 2017, a new law was approved by the Cyprus parliament regarding a scheme for the settlement of overdue taxes. This Law is applicable to Income Tax Law, Special Defense Contribution Law, Immovable Property Tax Law, Capital Gains Tax Law, Inheritance Tax Law, Special Contribution Law, Stamp Duty Law as well as VAT Law. The effective date of the Law as well as the relevant periods is not known yet but will be published in the official gazette.
Cyprus Law for Settlement of Taxes :Settlement on Offer
The taxes which are overdue can be settled in equal installments and cannot exceed:
- 54 installments for overdue taxes not exceeding €100.000, provided that each installment is not less than €50;
- 60 installments for overdue taxes exceeding €100.000, provided that each installment is not less than €1.852.
Any overdue taxes under the provisions of the new Law will not bear any new interest and/or any penalties and will not be subject to any criminal proceedings. In addition, taxpayers may be relieved of interest and/or penalties already imposed on the overdue taxes and further details on relief are yet to be issued.
How to enter the scheme
The method of entering the scheme requires the filing of an application to the Tax Department within 3 months from the date the Law enters into force. Further details are yet to be issued with regards to the format of the application and the method of its submission. Following submission, the Commissioner examines the application form and communicates its decision to the applicant within 15 days from the date of his decision together with a detailed statement showing:
- a breakdown of the overdue taxes,
- the corresponding interest and/or penalties,
- the number of monthly installments and
- the amount of each monthly installment.
Following the decision of the Commissioner, the taxpayer has 15 days to either accept or object the decision. The Commissioner must respond within 30 days from receipt of the objection and no response constitutes acceptance of the taxpayer’s proposal. Details with regards to the payment process
Failure to pay and scheme cancellation
The scheme may be cancelled in the following cases:
- delay in paying an installment for more than 3 consecutive months, including the month the instalment was due or
- delay to pay any 3 installments or
- failure to file tax returns and/or to settle current tax liabilities
The Law may be applicable also to taxpayers under criminal prosecution or whose a court decree is still pending against n relation to overdue taxes subject to the approval of the Attorney General.
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