Nicosia, Cyprus. Cyprus’ Tax Department is set to begin sealing the premises of businesses with unpaid tax debts during the summer, using enforcement powers introduced under the country’s new tax framework. The measures form part of a broader tax reform package approved by parliament and effective since January 1, 2026.
New enforcement tool under revised legal framework
According to a report by Philenews, the suspension of business operations and sealing of premises is among several additional enforcement tools granted to the Tax Department under the new legislation. For the measure to be activated, at least one of the three conditions set out in the revised legal framework must apply.
Debt threshold and scope of liabilities
Information obtained by the newspaper indicated that during the summer months the Tax Department intends to intensify pressure on taxpayers, both individuals and companies, with outstanding tax liabilities exceeding €20,000. The debts triggering the legislation will include the total amount owed together with surcharges and will cover direct taxes such as income tax, special defence contribution and capital gains tax, as well as withheld taxes, contributions and VAT.
Cases covered and procedural requirements
The measure will apply to cases involving self-assessment or final tax assessments issued by the Tax Commissioner, meaning all deadlines for objections will have expired or any administrative and judicial procedures will have been completed. In addition, outstanding debts must not be under objection and must not be pending before the courts.
Compliance campaign and focus on active businesses
The Tax Department is expected to launch a broader compliance campaign targeting debtors, beginning with large-scale offenders. Tax officials will also focus on active businesses for which there is evidence of ongoing commercial activity.
How will the Tax Department’s summer enforcement measures affect businesses with outstanding tax liabilities?
