A.The old mechanism

Taxable persons; legal entities or physical persons, had the right to submit written objection against VAT assessment after a VAT investigation.

The objection letter should have been submitted to the VAT authorities within 60 days, as per Article 51A of the Cyprus VAT Act, from the date of receiving the assessment.

Prior to the submission of a VAT objection to the Minister of Finance, according to Article 52A of the Cyprus VAT Act, the taxpayer should have:

a)Submitted all VAT returns; and
b)Paid the disputed VAT amount

If assessment was not rectified, taxable person should have sent an objection letter to Minister of Finance, within 60 days, as per Article 53 of the Cyprus VAT Act, from the date of receiving the notification for the assessment.

If assessment was not rectified, taxable person should have appealed at the High Court, within 75 days, as per Article 164 of the Cyprus Constitution, from the date of receiving the notification for the assessment.

B.The new mechanism, applicable since 7 July 2017.

B1.Amendments to Article 51A of the Cyprus VAT Act

The taxpayer has to submit written objection/appeal to the Tax Tribunal first instead of to the Minister of Finance within 45 days from the date of notification of the Commissioner’s decision.

The phrase High Court is replaced with Administrative Court.

Taxpayer can submit a VAT objection/appeal at the Tax Tribunal for the following matters:

  1. VAT imposed on the supply of goods or services, the intra-community acquisition of goods (acquisition of goods from other EU Member States) or importation of goods from outside theEU;
  2. The amount of any input VAT a taxable person is eligible toclaim;
  3. VAT assessment pursuant to Articles 49 or 49A (omission of the submission of VAT returns or certificates in connection to the acquisition of certain goodsfrom non-taxablepersons)
  4. Issuance of VAT assessment pursuant to Article 50 (limitation period and supplementaryassessments)
  5. Any directive or supplementary directive issued pursuant to Paragraph 2 or Part Iof the Schedule One (artificial segregation ofbusinesses)
  6. Any decision taken pursuant to Paragraph 1 of Part I of Schedule 4(transactions between related parties when no VAT isclaimable)

B3.  Addition of Article 52A of the Cyprus VAT Act 

Taxable persons, have the right to submit objections to the Commissioner of Taxation, but not to the Tax Tribunal, in relation to VAT matters included in the amended Article 52 of the Cyprus VAT Act (as described above), such as the registration and deregistration of a taxable person for VAT purposes, any request for claiming input VAT as per Article 12D etc.

B4.  Replacement of Article 53 of the Cyprus VAT Act

Preconditions for appealing to the Tax Tribunal, taxable person should have:

  1. Submitted the necessary documents and evidence to substantiate his claim;and
  2. Submitted all VAT returnforms;
  3. Either paid or arranged to be paid the VAT payableamount;
  4. Either paid the undisputed VAT amount or has given a relevant guarantee to the Tax Tribunal

B5.  Addition of Article 54A of the Cyprus VAT Act

The Tax Tribunal has the right within 12 months of the submission of an appeal to:

  1. Cancel or approve the whole or part of the Commissioner’s decision;or
  2. Amend the Commissioner’s decision;or
  3. Issue a new decision replacing the previous decision of the Commissioner of Taxation (the new decision should be issued within a 6-month period from the date of the submission of the appeal);or
  4. Refer the case back to the Commissioner of Taxation giving him instructions to perform specificactions.

Taxpayer reserves the right to submit an appeal to the Administrative Court following the final decision of the Tax Tribunal.

 

© PHS Hadjizacharias Ltd • 2017 • VAT dept

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