As reported in an earlier issue, in November 2011 the Cyprus Parliament enacted a law allowing for a partial write-off of interest and penalties on overdue tax liabilities of companies and individuals in respect of tax years up to and including 2008. Interest and penalties on overdue income tax, special defence contribution tax, immovable property tax, stamp duty and capital gains tax would be restricted to 5% of the principal amount owed, as long as the liability and the 5% surcharge were paid by 31 March 2012.
At the end of March 2012 the deadline for the amnesty was extended by eight months. Interest and penalties will be limited to 5% of the tax owed as long as payment is made by 31 October 2012.
At the time the amnesty was introduced in November 2011, the government estimated outstanding tax arrears for 2008 and prior at €355 million. The government has not announced how much of this amount has been collected to date.
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