Introduction

In 2014, the Inland Revenue department, which dealt with direct taxation, and the VAT department were merged to create a single Tax Department. One of the principal objectives of the unified body has been to modernize and streamline tax administration, for example by encouraging electronic filing of returns and settlement of tax liabilities by electronic means. Considerable progress has been made: all major categories of direct taxes can now be paid via online banking, and the queues to submit returns and pay taxes that used to be commonplace in tax offices towards the end of July and December have almost disappeared. In the spring of 2017 a system for electronic payment of VAT liabilities became operational, and electronic submission of VAT returns became mandatory. Two further steps in the modernization process took place in July 2017 with the enactment of laws making significant alterations to the VAT appeal procedure, and making electronic filing of income tax returns mandatory. The main provisions of the two laws are summarized in this article.

The VAT Amendment Law Of 2017

Taxpayers who disagreed with VAT assessments raised following examinations of their records had three options for resolving the issue. They could submit a written objection to the Commissioner of Taxes within 60 days of receiving the assessment under article 51A of the VAT Law,1 or a written objection to the Minister of Finance within the same time limit under article 53 of the VAT Law; or they could file an application to the Supreme Court of Cyprus within 75 days of receiving the assessment for review of the decision under article 146 of the Constitution. The first two options did not rule out the third: taxpayers who were dissatisfied with the decision of the Commissioner of Taxes or the Minister of Finance could subsequently file an application to the Supreme Court for review of their decision.

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Footnote

1  Law 86(I)/2017.

Previously published in Global Tax Weekly

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