Cyprus’s tax reform has brought not just rate changes and deductions but a sharp increase in financial penalties, with many fines more than doubling to reach what authorities call more deterrent levels.
Phileleftheros has compiled the main changes that took effect from 1 January.
Card payment violations
The administrative fine for refusing card payments has jumped to €6,000. Businesses that don’t accept credit card payments now face this penalty, up from €4,000 previously and €2,000 when the law first came in.
The requirement to accept credit cards at retail premises, service businesses, dining and entertainment venues has been in place since autumn 2021. It’s part of efforts to tackle tax evasion, protect public revenues and make things easier for consumers.
Filing and reporting penalties
Fines have increased for refusing or failing to submit tax returns, statements or information, and for breaching other duties under the Assessment and Collection Law. For each day the violation continues, the fine is now €20, up from €17.
The penalty for unjustified omission of income from a tax return has risen to €5,000 from 2,000 pounds. Non-compliance with Cabinet regulations on issuing invoices and receipts now carries a €5,000 fine, up from 450 pounds.
Late submission charges
For individuals, small companies (turnover below €1 million) and large entities, charges for not submitting returns or information within the set deadline are €150, €250 and €500 respectively.
These charges rise to €300, €500 and €1,000 respectively if taxpayers don’t comply within the deadline set by the Tax Commissioner. The same applies when the obligation concerns another person.
Where the Tax Commissioner publicly extends the tax return deadline—either to 31 July or 31 January—and the taxpayer files the return and self-assessment within the extended period, no charge is imposed for late filing or late payment of the self-assessment.
Breaking seals and criminal liability
Anyone who breaks a seal placed by the Tax Department on premises—due to failure to issue legal receipts or tax debts—commits a criminal offence and faces a fine up to €30,000 and/or up to two years’ imprisonment.
Executive directors, board members or any other officers carrying out financial management duties bear criminal liability for failure to pay tax.
Defence levy penalties
Someone who refuses, fails or neglects to pay the special defence contribution faces a fine up to €5,000 on first conviction (up from 500 pounds), plus an additional amount up to twice the contribution owed.
On second conviction, the fine reaches up to €100,000 (up from 600 pounds), with imprisonment up to two years (up from six months) and quadrupling of the contribution owed. For breach or non-compliance with any provision of the law, the fine is €1,000 (up from 500 pounds).
Defence procurement offences
The financial penalty for offences related to commissions or other financial benefit for purchasing defence items has risen to €30,000. The fine can reach up to €100,000 if it involves someone holding public office or in the service of the Republic.
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