Mandatory income tax filing and electronic payments for all companies
The Cypriot Council of Ministers recently adopted an amending bill that hopes to boost the state’s tax-collecting capacity through the mandatory filing of income tax return for everybody, and has also approved the obligation of companies to accept electronic payments.
The first important aspect of the proposed bill concerns the compulsory filing of a tax return by everyone who has income, and not only by those who have income above € 19,500 per year, which is the tax-free threshold in Cyprus. It is also aligning the non-payment of income tax with the non-payment of VAT. Non-payment of VAT is a criminal offense, and with the new amendments, the failure to pay a confirmed income tax will also be a criminal offense.
The second important aspect of the bill concerns the obligation by almost all businesses, that is, those that offer services and products, to accept electronic payments by credit or debit card. It is specified that the consumer will not be required to pay by card, but if he wishes, it will be the business’s obligation to accept electronic payments. This measure is believed to encourage electronic payments, strengthen tax control and increase State income.
Our firm, P. Constantinou & Co Ltd, will monitor these new developments and inform our clients and associates in the near future regarding how these new obligations will affect their tax payments and business.