Tax department identifies widespread tax evasion in coastal Cyprus

Over the past two weeks, the Cyprus Tax Department has intensified surprise inspections in popular coastal tourist areas, including Paphos, Ayia Napa, Protaras, and Larnaca. Amid increased summer traffic, authorities conducted over 100 targeted inspections focusing on water sports operators, boat trip organizers, souvenir shops, and catering venues. The results indicated that 60% of the audited businesses were violating tax laws.

Commonly identified infractions include the failure to issue legal receipts or invoices, recording lower transaction amounts than the actual sale price, and the refusal to accept credit card payments to encourage cash-only transactions for income concealment. In response, officials have issued formal warning letters to non-compliant businesses. If a business continues to violate regulations after a second notice and a subsequent five-day grace period, authorities may proceed with the enforcement of the business-sealing measure, which has been in effect since last June to combat tax evasion.