Thousands of overdue tax cases in Cyprus fall outside legal timeframe

Cyprus is losing millions in unpaid taxes after thousands of cases fell outside the legal deadline for assessment, the audit service has warned.

In its latest report on the tax department, the service said 139,078 individual taxes relating to 2014 – 2017 can no longer be imposed or amended, as the superintendent’s authority has expired.

For companies, a further 6,070 outstanding taxes from the same period are also now beyond the legal timeframe.

Moreover, the audit service revealed that many taxpayers with taxable income who have failed to submit returns are not even included in the pending tax figures.

According to the report, the tax department issued 789,519 tax assessments in 2024, down from 943,413 in 2023 and 905,967 in 2022, as part of a campaign to clear arrears.

However, 12,254 assessments for 2014 – 2016 issued in 2023, and 11,428 for 2014 – 2017 issued in 2024, mostly for legal entities, were already out of time under the law, meaning the state forfeited the right to collect them.

The service mentioned that most taxes in the past two years were imposed without proper audit or income adjustment.

While acknowledging efforts to cut the backlog, it warned that high-risk firms, such as those in construction, land development or with years of heavy losses, cannot be left unaudited.

Therefore, it called on the tax department to review returns promptly, prioritise riskier taxpayers and ensure assessments are issued within the legal window to protect public funds.