Tax Fraud in Cyprus

Tax fraud in Cyprus encompasses various actions aimed at evading or dishonestly reducing tax liabilities.

These are based on The Income Tax Law (Law 118(I)/2002) and the VAT Law (Law 95(I)/2000) which contains provisions related to tax fraud and penalties. Specific articles of the Penal Code of Cyprus, such as Article 303 (Fraudulent Evasion of Taxes) and Article 305 (Falsification of Documents), address criminal offenses related to tax fraud.

• Deliberate underreporting of income.
• Falsification of documents or records to inflate deductions or credits.
• Concealment of assets or income to avoid taxation.
• Providing false information or statements to tax authorities.
• Intentional failure to file tax returns or pay taxes owed.

The penalties for tax fraud in Cyprus can include:

• Fines: Monetary penalties imposed based on the amount of tax evaded or attempted to be evaded. The fines can range from a percentage of the tax due to several times the amount evaded.
• Imprisonment: Offenders convicted of tax fraud may face imprisonment for a period determined by the court, depending on the severity of the offense.
• Confiscation of Assets: In addition to fines and imprisonment, tax authorities may confiscate assets acquired through fraudulent means or used in the commission of tax fraud.
• Additional Taxes and Interest: Taxpayers found guilty of fraud may be liable for the full amount of taxes evaded, plus interest and penalties.

Legal Process:

• Investigation: Tax fraud cases in Cyprus are typically investigated by the Tax Department, which may conduct audits, interviews, and gather evidence to determine the extent of fraud.
• Prosecution: If evidence of tax fraud is found, the Tax Department may refer the case to the Attorney General's Office for prosecution. Prosecutors then file charges against the accused and present evidence in court.
• Trial: Tax fraud cases are tried in criminal courts, where the accused has the right to legal representation and a fair trial. The court evaluates the evidence presented and determines guilt or innocence.
• Appeal: Both the prosecution and the defense have the right to appeal the court's decision. Appeals are heard in higher courts, and the decision of the appellate court is final.