Changes to the Assessment and Collection of Taxes Law

Law 97 (I) of 2017 amends the Assessment and Collection of Taxes Law of 1978 to 2016 (“the ACT Law”) with effect from 14 July 2017.

The principal changes introduced by the amending law are as follows:

  • Tax returns for 2017 and subsequent years must be submitted by electronic means or by other means approved by the Commissioner of Taxes.
  • The six-year limitation (12 years in the event of deliberate omission to provide information) on raising assessments provided for in articles 21 and 23 of the ACT Law does not apply if the assessment is issued after a court decision.
  • Notices of assessment may now be served electronically, as an alternative to being served personally or by mail.
  • In addition to any penalty imposed in the event of omission to pay any tax due by the specified deadline, an additional amount of 5% of the tax due will be imposed if the omission continues for more than 2 months from the deadline.
  • An administrative fine of up to EUR 20,000 may be imposed for breach of the ACT Law or any Regulations or other secondary legislation issued under it, depending on the gravity of the infringement, irrespective of any criminal liability. Before it imposes an administrative fine the Tax Department must notify the person concerned and give them the right to make representations. An appeal against an administrative fine may be made to the Tax Tribunal or the Administrative Court.
  • Specific administrative fines may be imposed for failure to comply with the country by country reporting requirements under the Multilateral Competent Authority Agreement, and for breach of obligations relating to FATCA and the Common Reporting Standard contained in the relevant ministerial orders issued under the ACT Law. These range from EUR 500 for failure to provide information to enable the Tax Department to verify its records to EUR 10,000 for failure by the reporting entity of a group of multinational enterprises based in Cyprus to submit a country by country report. In the event of failure to pay the administrative fine or failure to remedy the breach, the amount may be increased to EUR 20,000. Before it imposes an administrative fine, the Tax Department must notify the person concerned and give them the right to make representations. An appeal against an administrative fine may be made to the Tax Tribunal or the Administrative Court.

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