It will take a long time from what appears to be the investigation of the Department of Taxation to determine whether audit and law firms and / or land development companies, which were actively involved in the Cyprus Investment Program, are related to tax evasion or other related irregularities in burden on the public. A process that started in December 2020, with the encouragement of the Parliament, and has to go a long way to “dust” all the cases of providers who offered services to thousands of foreign investors who applied and received naturalization.
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According to information from “F”, the officials in the Tax Department have to deal with about 240 audit and legal offices and about 50 land development companies, which are involved in real estate transactions for the purpose of obtaining a Cypriot passport. So far, the survey has targeted about 80 service providers, ie 1/3 of the offices, and audited tax and VAT returns. According to sources familiar with the matter, nothing shocking has been found so far, but the essential issue is how far the investigation will go.
The Department of Taxation expects information from the government on the required scope of the investigation of the offices that mediated, for a fee, the naturalizations. Once it is clear how deeply the officers will search the sanctuaries of the companies involved, it will be judged and how long the investigation will last. For the time being, the … optimistic scenario predicts that the research on service providers will require from one to 2 years, while it is not excluded that it will take more, if cases of possible loss of income tax or other debts, several millions, are identified.
In case the surveys seem to be inevitably long-term, it is obvious that significant human resources and man-hours will be used in this survey and will affect other open control fronts held by the Tax Department.
The tax findings so far, as we have been told, mainly concern issues of interpretation of the legislation, ie the “windows” that can be used in a law on tax issues, for the benefit of the taxpayer. That is, these are cases where the Tax Department identifies some problems regarding the declared income and the tax that was cut, but the directly affected person invokes a different interpretation of the provisions of the legislation, in order to justify his choices. In these cases, as we have been told, the issues do not end “so simply”. If the officials of the Tax Department find out that one provider did not pay the tax due to him and the difference is several millions, then the case will be dragged on, objections will be filed and most likely the disputes between the Tax Department and the provider will be taken to court. usually consumed in long-term processes.
In cases where the difference is a few thousand euros, cases are closed faster, with a settlement.
Information in the Parliament
Tomorrow, Thursday, the parliamentary Audit Committee will discuss an issue that was entered ex officio by AKEL MPs Irini Charalambidou, Stefanos Stefanou and Koutra Koukouma and the Ecologists MP Giorgos Perdikis, with the title the Department of Taxation in the law and control offices that provide services within the framework of the Cyprus Investment Program “. The meeting was attended by the Minister of Finance, the Auditor General, the Director General of the Ministry of Finance and the Tax Officer. The deputies will ask to be informed first hand about the progress of the investigations and about the findings of the audits so far.
