Nicosia, Cyprus. Cyprus’ tax reform, which entered into force on January 1, revised rates and deductions and substantially increased financial penalties to strengthen tax compliance and deterrence.
Higher fine for failure to accept card payments
According to Philenews, the administrative fine for breaching the decree on card payments has increased to €6,000 for businesses that do not accept credit cards. Previously it stood at €4,000, while during the first implementation phase it was €2,000.
The obligation has been in place since autumn 2021 across retail, services, catering and leisure venues as part of efforts to combat tax evasion, protect public revenues and facilitate consumers.
Increased penalties for reporting and documentation breaches
Financial penalties have also risen for refusal or failure to submit declarations, statements or data, or for breaching duties under the certification and collection law. The daily charge for a continuing violation is now €20, up from €17.
The fine for unjustified omission of income from a tax return has increased to €5,000, compared with £2,000 previously. Non-compliance with invoicing and receipt regulations set by the Council of Ministers is punishable by €5,000, up from £450.
Late submission charges by taxpayer category
Charges for late submission differ by taxpayer category and are set at €150 for individuals, €250 for small companies with turnover below €1 million and €500 for large entities.
Higher charges apply when non-compliance continues after a deadline set by the tax commissioner, including cases involving third-party obligations, at €300, €500 and €1,000 respectively.
How do you expect the higher penalties to affect tax compliance among businesses and taxpayers in Cyprus?
