Cyprus’ outstanding tax debt rose to €4.64 billion by the end of 2025, with immediately collectable arrears reaching €3.32 billion, according to data from the Tax Department.

The figures were reported by Philenews, based on Tax Department data showing a sharp increase in overdue liabilities and a growing use of enforcement measures to recover unpaid taxes.

The data show that €979.4 million, representing 29.5 per cent of the immediately collectable debt, relates to relatively recent tax arrears that have been outstanding for less than one year.

A further €992.6m, or 29.9 per cent of the collectable debt, has remained unpaid for between one and four years.

The remaining more than €1.32bn, accounting for approximately 40 per cent of immediately collectable tax debt, relates to liabilities that are more than four years old.

Overall tax debt stood at €4.64bn at the end of December 2025, compared with €3.93bn a year earlier, marking an increase of about €710m.

Before enforcement measures are taken, the amount considered immediately recoverable by the Tax Department stands at €3.32bn.

At the end of December 2024, the corresponding figure was €2.29bn.

The department’s analysis also shows that €1.31bn of the total outstanding debt is considered not immediately recoverable.

Once this amount, which is regarded as difficult to collect, is excluded from the total, the immediately collectable debt amounts to €3.32bn.

Of that sum, €901.5m is already subject to enforcement action by the Tax Department.

This includes €325.9m in overdue tax liabilities for which legal proceedings have been initiated, meaning the debtors have been taken before the courts.

Another €575.4m is subject to administrative collection measures, including the registration of charges against immovable property without a court order, commonly known as a MEMO, and the seizure of funds from bank accounts.

The Tax Department has so far seized €263,000 from bank accounts through these measures.

After accounting for debts already subject to enforcement and bank account seizures, the amount that remains immediately payable stands at €2.42bn.

The Tax Department has also been equipped with additional enforcement powers under the tax reform that came into force on January 1, 2026.

In addition to registering MEMOs and freezing funds held in bank accounts, the department has, in recent weeks, activated powers allowing it to seal business premises where tax debts exceed €20,000, as well as in cases where businesses fail to issue receipts or invoices.

From 2027, that measure will also apply to taxpayers who fail to submit tax returns.

The department said its enforcement measures are intended to improve the collection of overdue taxes and strengthen the effectiveness of the tax authorities.

At the same time, it continues to pursue criminal prosecutions for the non-payment of withheld taxes, including Value Added Tax (VAT), Pay As You Earn (PAYE) deductions and the Special Defence Contribution, as well as for failing to submit tax returns.

These procedures can result in criminal penalties imposed by the courts together with repayment arrangements, or out-of-court settlements accompanied by measures to ensure compliance.

Compliance may include the submission of outstanding tax returns or the agreement of repayment schedules.

Some outstanding liabilities have also been incorporated into structured repayment arrangements for overdue tax debts, although in certain cases the agreed repayment plans have yet to be completed.

According to the Tax Department’s analysis, the average age of immediately collectable tax debt increased to 80.3 months, or approximately 6.7 years, by the end of December 2025.

That compares with 58.3 months at the end of 2024, the data showed.

The department cautioned, however, that this indicator is not considered fully representative because it is influenced by substantial amounts of long-standing unpaid tax liabilities that have accumulated over many years and are regarded as effectively uncollectable.