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The Cyprus IRD and VAT Service have merged

Ms. Lella Hadjinestora's picture
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 The Cyprus Inland Revenue Department has merged as of 1/7/2014 with the VAT Service and the combined administration has been renamed as the Tax Department. This integration is expected to bring multiple benefits to the Cyprus economy and better service to taxpayers.

 

The integration of the Inland Revenue Department with the VAT Service was part of the international bail-out agreement between Cyprus and the TROIKA (EU, ECB, IMF). According to the terms of the agreement with the TROIKA, Cyprus committed to reform of the revenue administration "with the objective to reinforce the efficiency and effectiveness of revenue collection and the fight against fraud and evasion, with a view to increasing fiscal revenue". The legislation includes inter-alia provisions for a fixed term of office for the new Tax Commissioner and sound principles for rotation concerning the occupying of the office of Tax Commissioner.The authorities have also committed to implement reforms concerning the functioning of the new integrated tax administration and to the strenghthening of the legal framework relating to the assessment and collection of taxes. Changes in the tax legislation include inter-alia the establishment of a self-assessment system for all income taxpayers, harmonising the legislation among tax types so that not paying withholding taxes is a criminal offence, attribution of personal responsibility for payment of company taxes to those who effectively control a company, garnishing of bank accounts etc.

Mr. Yiannakis Lazarou is currently head of the Tax Department following his appointment as Tax Commissioner for the three month period starting 11/7/2014.