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Audit office says reasonable suspicion of widespread tax evasion by betting companies

Photo: CNA

The audit service said Tuesday there was reasonable suspicion of widespread tax evasion by betting companies because of the inadequate coordination between the national betting authority and the tax department.

The findings were included in the service’s audit report of the national betting authority (NBA) that was published on Tuesday.

According to the report, a preliminary comparison of the betting revenues declared to the NBA with those at the tax department showed certain discrepancies.

“These are differences which in certain cases concern millions of euros,” the report said. “The chairwoman of the NBA informed us that possible differences could be due to the fact that some betting companies show their net income in the financial statements, noting that the NBA and the tax department cooperate when necessary to ensure public interest.”

The audit service said the response was not “satisfactory” and it has been proven that the NBA does not provide the tax department with adequate information.

The auditor suggested that the tax commissioner should investigate the matter for the purpose of Imposing taxes and ask the NBA to submit a detailed report with the revenues each year.

Auditors also found that two betting companies with revenues reaching €75m are foreign entities registered at the registrar of companies but not the tax commissioner registry.

Because of this, they filed no tax returns.

Another company, which made missions in 2017, said it was not a tax resident of Cyprus, the report said.

The company says that its HQ is outside the EU although its accounts are audited by a Cypriot company.

The director appears to be a foreign national, according to the auditor, although he has a registered office on the island and “board meetings and company decisions are possibly made in Cyprus.”

The auditor recommended to the tax commissioner to investigate and even if he finds that the company is not a tax resident of Cyprus “we have asked for his comments on whether the company in question ought to be taxed and declare part of its income from bets in Cyprus.”

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