Cyprus tax department initiates summer crackdown on tax evasion

During July and August, the Cyprus Tax Department is launching intensive audits in coastal and tourist areas to combat tax evasion. Inspectors will monitor businesses and randomly check customers for valid receipts; if discrepancies are found, they will use tablets to conduct immediate on-site cross-referencing. The first phase targets 500 businesses, including supermarkets, betting agencies, and vehicle retailers, with outstanding debts exceeding €1 million. Under the current legal framework, businesses with tax debts of €20,000 or more risk closure. Non-compliant businesses will receive three warnings with a total grace period of 25 days (10, 10, and 5 days respectively). Failure to comply can result in the Commissioner ordering the closure of premises for up to 20 days. Additionally, a planned measure to close businesses for failing to file VAT and withholding tax returns has been postponed until 2027.