New Law in Cyprus on settlement of overdue taxes

A new Law in Cyprus which provides a scheme that regulates the settlement of overdue taxes of has been voted upon from parliament. The Law gives the opportunity to taxpayers in Cyprus to pay overdue tax liabilities through a regulated instalment scheme with some relief of interest and/or penalties. Its main provisions are summarised below:

What the scheme allows

The overdue taxes will have to be settled in equal instalments, the number of which should not exceed:

-54 instalments for overdue taxes not exceeding €100.000, provided that each instalment is not less than €50
-60 instalments for overdue taxes exceeding €100.000, provided that each instalment is not less than €1.852

No new interest and/or penalties will be charged and no criminal proceedings will commence for overdue taxes which are regulated under the provisions of the Law.

Which taxes are within the scope of the scheme

The provisions of the Law apply to tax liabilities that relate to periods which come before the effective date of the Law and arise under the Income Tax Law, the Special Defence Contribution Law, the Immovable Property Tax Law the Capital Gains Tax Law, the Inheritance Tax Law, the Special Contribution Law, the Stamp Duty Law and the VAT Law.

Application process to enter the scheme

A taxpayer who wishes to enter the scheme, should file an application to the Tax Department within 3 months from the date the Law entered into force.

Details with regards to the payment process

The instalments will need to be paid to the Tax Department in the manner specified in the Commissioner’s decision.