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Cyprus – Changes in VAT appeal procedure published in official gazette

A law (VAT Amendment Law No. 86(I)/2017 – the “Law”), which amends the procedure for challenging VAT matters was published in the official gazette of the Republic of Cyprus, signalling its coming in to effect.

The right of taxpayers to submit an appeal to the Tax Commissioner in the case of decisions of the Tax Department on disputed VAT matters is extended by the Law to other cases, such as refund requests, input tax recovery, registration and deregistration, and the imposition of additional taxes and fines.

The Law also replaces the current appeal procedure by removing the option of filing an appeal to the Minister of Finance. Instead of that, a new hierarchical recourse to the Tax Tribunal, as established by the Assessment and Collection of Taxes Law, is introduced by the Law. The Tax Tribunal can handle a taxpayer’s appeal only after the taxpayer has received a response to the appeal from the Tax Commissioner.

Taxpayers must submit the appeal to the Tax Tribunal in 45 days from the date the decision of the Tax Commissioner is communicated to them. Assuming all necessary documentation is submitted by the taxpayer, the Tax Tribunal needs to examine the appeal and issue its judgment within a year from submission of the appeal. The Tax Tribunal may wholly or partially uphold or reverse the original decision, amend it, replace it by a new decision or forward the case to the Tax Commissioner for undertaking specific action. In case taxpayers are not satisfied with the decision of the Tax Tribunal or the Administrative Court, they can apply to the Supreme Court.

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