Cyprus’s Tax Department has moved a step closer to sealing business premises for the first time after issuing second warning notices to companies that failed to issue receipts or invoices or refused card payments.
According to information obtained by Phileleftheros, the businesses include hairdressers, barbers, clothing shops, massage businesses and watersports operators.
The warnings form part of a campaign to enforce a new tax reform measure allowing authorities to seal businesses that fail to comply with tax rules.
Tax officials initially identified a large number of businesses that were not issuing receipts or accepting credit cards.
After the first 15-day deadline expired, officers returned to the businesses and found that some had still not complied.
Among them was a woman operating businesses in coastal areas offering hair braiding and extensions. Officials also found a barber, a masseur, a café owner and a watersports business providing services without issuing receipts.
Those businesses have now received a second warning and have another 10 days to comply.
Closure after third warning
If the breaches continue, the Tax Department will issue a third notice giving businesses five days to submit their representations.
If they still fail to comply, the Department will move to seal the first premises.
The closure will take effect once the decision is published in the Official Gazette.
Initially, premises can be sealed for 10 days. The Tax Commissioner can extend the closure by a further 20 days if the business continues to breach the law.
According to Phileleftheros information, the sealing order will be lifted once the business complies and the Tax Commissioner issues the relevant certificate.
Closures also possible over tax debts
The measure does not apply only to failures to issue invoices or accept card payments.
Businesses may also be sealed if they owe more than €20,000 in income tax, Special Defence Contribution, capital gains tax or VAT.
From 2027, the measure will also apply where a business fails to submit at least two tax returns, 12 withholding tax and contribution returns, or three VAT returns.
420 businesses found in breach
Since the Tax Department began its enforcement campaign in July, officials have carried out 700 visits, mainly in tourist areas.
Checks have included kiosks, barbers, restaurants and other food businesses, souvenir shops, watersports operators, car parks, pharmacies, coffee shops, pubs and businesses offering sea excursions.
Officials found that 60% of the businesses checked, or 420 companies, were providing services without issuing receipts.
On follow-up visits, however, the majority were found to have complied with the law. Businesses had begun issuing receipts, installed cash registers and started accepting credit cards.
In some cases, Tax Department officers were obstructed by owners or managers during inspections.
The law provides for a fine of up to €30,000 and/or imprisonment of up to two years where a sealing order is breached.
The Tax Department campaign is expected to continue intensively in the coming months, with inspection teams carrying out checks around the clock.
