The Cyprus government has proposed a series of legislative amendments aimed at strengthening tax enforcement, as part of a broader tax reform currently under public consultation. The proposed amendments are intended to become effective as of January 2026, subject to final approval and vetting by the House of Representatives.
Among the key proposals are: expanded information-gathering powers, suspension and sealing of non-compliant business premises, electronic service of indictments, mandatory electronic rent payments, broader criminal liability for legal entities, restrictions on deregistration and changes in company officers, the introduction of liens on shares for unpaid taxes, and the acceptance of immovable property in settlement of tax debts.
The proposed amendments represent a significant step in strengthening Cyprus's tax enforcement framework. However, it is essential that the exercise of the broader powers granted to the Tax Department is tempered by the principle of proportionality. While the primary aim is to deter and address deliberate non-compliance, the legislative process must also preserve taxpayer rights and legal safeguards. With the reform package currently under public consultation, stakeholders have a crucial opportunity to engage in meaningful dialogue and ensure that the final measures strike the right balance between effective enforcement and fair treatment.
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