Law 97(I)/2017 has amended the Assessment and Collection of Taxes (ACT) Law 1978 with effect from July 14 2017. The principal changes introduced by the amending law are as follows:
- Tax returns for 2017 and subsequent years must be submitted by electronic means or other means approved by the commissioner of taxes.
- The six-year limitation (or 12-year limitation in the event of a deliberate omission to provide information) on raising assessments provided for in Articles 21 and 23 of the ACT Law does not apply if the assessment is issued following a court decision.
- Notices of assessment may now be served electronically as an alternative to service in person or by mail.
- In addition to any penalty imposed in the event of a failure to pay tax due by the specified deadline, an additional 5% of the tax due will be imposed if the failure to pay continues for more than two months after the deadline.
- An administrative fine of up to €20,000 may be imposed for a breach of the ACT Law or any regulations or other secondary legislation issued thereunder, depending on the gravity of the infringement, irrespective of any criminal liability. Before it imposes an administrative fine, the Tax Department must notify the party concerned and give it the opportunity to make representations. An appeal against an administrative fine may be made to the Tax Tribunal or an administrative court.
- Specific administrative fines may be imposed for:
- failure to comply with the country-by-country reporting requirements under the Multilateral Competent Authority Agreement; and
- a breach of obligations relating to the Foreign Account Tax Compliance Act and the Common Reporting Standard contained in the relevant ministerial orders issued under the ACT Law.
The fines range from €500 for failure to provide information to enable the Tax Department to verify its records to €10,000 for failure by the reporting entity of a group of multinational enterprises based in Cyprus to submit a country-by-country report. In the event of failure to pay the administrative fine or failure to remedy the breach, the fine may be increased to €20,000. Before it imposes an administrative fine, the Tax Department must notify the party concerned and give it the opportunity to make representations. An appeal against an administrative fine may be made to the Tax Tribunal or an administrative court.
For further information on this topic please contact Alexandra Spyrou at Elias Neocleous & Co LLC by telephone (+357 25 110 100) or email ([email protected]). The Elias Neocleous & Co LLC website can be accessed at www.neo.law.