Cyprus tax crackdown nets €44m from 513 high-risk debtors

Economy taxTop News Cyprus tax crackdown nets €44m from 513 high-risk debtors Cyprus Tax Crackdown Nets €44m From 513 High Risk Debtors Relevant News Cyprus tax crackdown nets €44m from 513 high-risk debtors 24 June 2026 Phedon Phedonos enters plea today as rape trial set for September 24 June 2026 Echoes from the future: The missing pieces in Cyprus’s emerging tech ecosystem 24 June 2026 Eleftheria Paizanou 24 June 2026 FacebookXWhatsAppEmailPrintViber Cyprus’s Tax Department tracked down 513 large debtors last year who owed €44.1 million in unpaid taxes, part of a two-year enforcement drive that recovered nearly €99.5 million from more than 1,000 major taxpayers, according to information obtained by Phileleftheros. The 513 taxpayers — classified by the department as high-risk — had accumulated debts across income tax, capital gains tax, the special defence contribution, and VAT. Of those, 396 owed direct taxes totalling €37.9 million, while a further 117 carried VAT liabilities of €6.2 million. The average debt stood at €86,000, according to the same information. Broader enforcement The crackdown on large debtors formed part of wider enforcement activity across 2025. Tax officials carried out VAT inspections at 1,236 businesses, resulting in assessments of €32.4 million, according to figures obtained by Phileleftheros. A further 73 tax fraud cases were investigated, with €4.1 million in tax assessed. Officials also examined the capital statements of 1,067 taxpayers, levying €3.1 million in additional tax, and reviewed financial statements in around 18,000 cases, resulting in assessments of €75.3 million. In total, the Tax Department imposed additional taxes of €115 million on 20,338 individuals and legal entities following on-site inspections, tax fraud investigations, and reviews of capital and financial statements. Reduced VAT abuse The Tax Department also pursued taxpayers who had wrongly claimed the reduced five per cent VAT rate on the purchase or construction of a primary residence, Phileleftheros reports. Around 1,715 on-site inspections were carried out, uncovering 93 ineligible individuals, who were required to pay back €11.5 million. A further 214 taxpayers voluntarily came forward and paid €9.3 million in VAT. Those found to have misused the scheme had been renting their properties through platforms such as Airbnb and Booking.com, or using them as holiday homes, rather than as a primary residence. As a result, they were required to pay an additional 14 per cent VAT on top of the five per cent already paid, bringing the total to the standard 19 per cent rate. Between 2022 and 2025, the department identified 1,295 taxpayers who had claimed the reduced rate without being entitled to it, imposing additional taxes of €73.2 million. Around 12,430 compliance letters were sent to individuals and legal entities during the same period as part of the department’s risk management and data analysis activity. Debt pile grows Total tax debt rose by €700 million in 2025 to reach €4.64 billion, up from €3.93 billion the previous year. The immediately collectable debt — before enforcement measures — stood at €3.32 billion in December 2025, including interest and charges, compared with €2.59 billion in the same period of 2024. Around 60 per cent of the immediately collectable amount relates to debt less than four years old: 29.5 per cent covers current debt under one year old, and 29.9 per cent covers debt aged between one and four years. The total value of taxes under active collection measures in 2025 reached €901.5 million, up from €729.8 million in 2024. The net collectable amount of outstanding taxes — before bank account seizure measures — stood at €2.42 billion in December 2025, compared with €1.63 billion in 2024. Read more: Tax Department to target coastal businesses in summer evasion crackdown Subscribe to our Newsletter Latest News Phedon Phedonos enters plea today as rape trial set for September Echoes from the future: The missing pieces in Cyprus’s emerging tech ecosystem Temperatures to hit 38°C inland as Cyprus stays sunny on Wednesday Trump’s Board of Peace to meet in Cyprus next week, Times of Israel reports Christodoulides hints at imminent energy announcements as Cyprus marks 250 years of US independence Ebola cases in Congo reach highest first-month total of any outbreak, WHO says EXPLAINER: Will US and international sanctions on Iran be lifted? Follow en.philenews on Google News and be the first to know all the news about Cyprus and the world.