Amnesty On Overdue Tax Payments

In November 2011 the Cyprus Parliament enacted a law allowing a partial write-off of interest and penalties on overdue tax. The law applies to liabilities of individuals and companies in respect of income tax, SDC tax, immovable property tax, stamp duty and capital gains tax for periods up to 31 December 2008 and provides for the waiver of interest or penalties in excess of 5% of the principal amount owed, as long as the balance is paid by 31 March 2012.

According to the tax authorities, outstanding tax arrears for 2008 and prior years amount to some €355 million. The government believes that the waiver of fines and penalties will encourage taxpayers to settle their debts, resulting in the collection of these long-overdue amounts.