Tax Department Seizes €4 Million From VAT Fraud
50 Property Owners Misused Reduced VAT Rate; €45 Million Collected
They went on vacation and were caught by the Tax Department - 50 people will pay €4 million in VAT!
In total, over €45 million will end up in the Tax Department from those who paid 5% instead of 19% VAT for residential properties. They might have escaped for some time, but the Tax Department is determined to recover the amounts related to the reduced 5% VAT on primary residences that some individuals took advantage of, even though they were not entitled to it.
From the campaign that started nearly two years ago, the Tax Department has collected around €40 million, with an additional €4 million expected to be recovered from recent inspections by the department.
Specifically, according to the data, in July the Tax Department conducted 1,000 on-site inspections, mainly in the Famagusta District, and identified at least 50 cases that violated the legislation. As a result, the property owners must return the difference in VAT, which amounts to approximately €4 million.
It is noted that several property owners had declared their homes as primary residences to benefit from the reduced 5% VAT rate. However, it was later found that these homes were either used as vacation homes by the owners themselves or rented out to tourists. Therefore, they are not entitled to the reduced rate and should have paid the standard 19% VAT.
Following the inspections, those found to have benefited improperly are required to pay the 14% difference that arises.
According to the Tax Department, inspections will continue and will be repeated for properties where tenants have not been identified, so that all property owners who unlawfully benefited from the reduced rate will return the difference.
At the same time, the Tax Department notes that owners can voluntarily visit the department to settle their debts, which can also be paid in monthly installments.
It should be noted that over 4,000 inspections have been conducted so far, and more than 500 buyers have been identified from whom the lost VAT will be recovered. Meanwhile, over 500 individuals have voluntarily informed the Tax Department and returned the amount.
