Cyprus: Tax Procedures In The Time Of COVID-19

The current year will more likely be remembered as the year prompting for change. The questions raised during the pick of the COVID-19 pandemic hinted that we shall not "go back to normal." Instead, we shall push for innovating the field of taxation, both on a global as well as on a local level. The sprinkling of advancement in the tax department (i.e. going digital through the launch of the online tax portal and changing the stamp duty procedure) is a first step to collect taxes more efficiently without needing to attend the premises of the tax department physically.

THE TAX PORTAL

The tax portal is a central service line where people and companies can be informed about their debts and payments towards the tax department and pay their taxes online. The physical presence of the taxpayer in the District Office is therefore not required for certain services. This is a step forward to the electronic communication of the people with the tax department.

Indeed, throughout the past 6 months, the communication with the Cypriot tax department underwent some changes in light of the COVID-19 pandemic. Cases which previously required the taxpayers to physically attend the premises are now being accepted via the primary e-mail address of the tax department and are subsequently distributed to the appropriate administrator.

UPDATES IN THE AREA OF STAMP DUTY

The Tax Department announced that, as of 29/6/2020 the stamping of documents with fixed fees will be done by the interested parties themselves (i.e. they will bear the cost directly) and the purchase of stamps will be carried out only by authorized representatives and not by the District Offices of the Tax Department.

Moreover, as of 27/07/2020, the process of stamping documents based on the value of the contract has changed.

Stamping of certain categories of documents whose stamp duty is calculated based on the value of a contract.

This concerns the below categories of contracts:

(a) real estate leases,

(b) rental documents,

(c) employment contracts and

(d) purchase and sale documents.

The new stamping process concerns only original/ initial contracts and not additional/ supplementary / addendum to the original contract.

Description of procedure

1. Special Stamp Fee Calculation Tool

For the new process of stamping documents based on the value of the contract, a special "Stamp Fee Calculation Tool" has been created, which is posted on the website of the Tax Department here.

2. Stamping of contracts when the stamp duty does NOT exceed ? 100 (one hundred EUR) - Timely stamping (within 30 days from signing or drafting the document).

The interested party:

i. Calculates the stamp duty, using the "Stamp Fee Calculation Tool".

ii. Sends to the Tax Department via e-mail the form "Calculation of Stamp Fee", which appears on the screen.

iii. Purchases stamps from the authorized representatives (Table 1 of the update) and NOT from the District Offices of the Tax Department.

iv. Affixes and cancels the stamp with the same procedure as applies to fixed charges.

Late stamping and issuance of true copies

The same procedure is followed as in the stamping of documents with fixed stamp duties.

3. Stamping of contracts when the stamp duty exceeds ? 100 (one hundred EUR)

The interested party:

i. Calculates the stamp duty using the "Stamp Fee Calculation Tool".

ii. Prints the form "Calculation of Stamp Duty", which is submitted to the District Tax Department Offices for payment of the stamp duty (payment code 0800).

iii. Presents to a Tax Officer the receipt of payment together with the document to be stamped, who then seals and cancels the stamp.

Needless to state that the validation of the accuracy of the information for the purposes of calculating the stamp duty is still the responsibility of the Tax Department, which will carry out the necessary checks to ensure proper tax compliance.

If you need any further guidance, you can refer to the tax department's website.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.