Cyprus Tax Department to Begin Mass Raids in Resort Areas in July

In July and August, the Cyprus Tax Department will carry out large-scale inspections of businesses in tourist areas. This is part of a new tough reform to combat tax evasion. Seasonal businesses, where customer traffic rises sharply in summer, will be hit first.
The raids will focus on two main areas: identifying large tax debts and checking the issuance of cash receipts. Inspectors, armed with tablets with access to a shared database, will stand by outside establishments and randomly check customers as they leave. If a customer does not have a receipt or it has been issued with irregularities, the inspection will move inside the premises.
Under the new rules, a company or sole proprietor can be temporarily sealed and closed for tax debt exceeding 20,000 euros, as well as for systematically refusing to issue receipts. Separate attention is being paid to the top 500 largest debtors with debts of more than 1 million euros — among them are supermarkets, betting shops, car dealers and yacht sellers.
The penalty scheme is the same for everyone: violators will be given three warnings and a total of 25 days to correct the situation (10 days, then another 10 and a final 5 days). If the debts are not repaid or the violations continue, the business will be sealed. It will be possible to resume operations only after personal approval from the tax commissioner, and in the event of a repeat violation, the period of forced closure may be extended by another 20 days.