17/10/22

CYPRUS: Tax Department to Investigate 81 Golden Passport Service Providers.

As published on schengenvisainfo.com, Monday 17 October, 2022.

A total of 81 providers of naturalisation services are being investigated by the Cyprus Tax Department.

According to Phileleftheros, the investigations are focused on the transactions that the providers had with investors as well as specifically controls on whether they had included VAT charges in their invoices, SchengenVisaInfo.com reports.

About 81 providers of naturalisation that are being investigated by the Tax Department are linked to a total of 1,541 naturalisation requests.

In this regard, the report of Phileleftheros says that the Members of the House Watchdog Committee have requested such controls after the Audit Office report revealed that some providers were declaring fewer revenues than they were actually making.

According to the Tax Department, it stressed that it completed a total of 49 controls out of a total of 81 providers and also imposed VAT charges surging to a total of 1.9 million euros.

It has also revealed that some investors abused the reduced 5 per cent VAT rule, which was provided for persons intending to use the house or apartment they purchased to reside permanently; after they were found not using the properties, thus they were subject to additional taxes, according to Phileleftheros report.

Based on the finding of the Audit Office, Cyprus saw a loss of a total of 204 million euros due to the abuse of the VAT discount by 1,298 investors who bought mansions as well as luxurious apartments for a total of 1.6 billion euros but did not use them to reside permanently.

Recently, the Bar Association of Cyprus investigated over 25 legal firms while; it fined ten of them after being involved in the Citizenship by Investment program.

In addition, the Chairman of the Association, Christos Clerides, stressed that another ten legal firms are also being investigated.

In this regard, a report provided by Philenews stressed that as of €70,000 in fines have already been paid related to Cyprus’ Citizenship by Investment program.

The Citizenship by Investment Program (CIP) permitted wealthy internationals, as well as their family members, to acquire citizenship in Cyprus, provided that they contributed financially to this country by investing a specific amount of money.

However, there were reported a large number of illicit affairs related to the country’s Citizenship by Investment scheme. An investigative report provided previously by Al Jazeera, also known as the Cyprus Papers, showed that this program also benefited criminals with the US $2.5 investment in this country.

The report of the Audit Office also revealed that the Golden Passport scheme remained rotten until the end.