The tax office is inspecting Cypriot resorts. Sixty companies were caught failing to issue receipts.

Tax inspections in resorts in Cyprus have significantly accelerated during the peak tourist season. Over the past two weeks, officials have conducted more than 100 unannounced inspections in Paphos, Larnaca, Ayia Napa, and Protaras. They found that 60 businesses had failed to provide a receipt after selling goods or providing services.

The focus of the investigation is primarily on businesses that serve large numbers of tourists during the summer: restaurants and other catering establishments, souvenir shops, cruise operators, and companies offering water sports and attractions. The tax authorities are not only checking receipts, but also paying attention to incorrect amounts on documents and cases where businesses refuse to accept card payments.

Tax inspections in resorts. Officials are waiting in front of the premises.

The way some inspections are conducted may surprise entrepreneurs.

Tax officials appear in front of selected establishments and wait for customers to finish shopping or use a service. They then ask those leaving to show them their receipt or invoice.

This allows them to compare the actual transaction with the documents issued by the entrepreneur.

In the last two weeks, such unannounced inspections were carried out over 100According to Philenews, as many as 60 companies did not issue required receipts to customers.

This does not mean, however, that six out of ten of all businesses operating in Cypriot resorts are breaking the law. Inspections are targeted, and the office selects industries and companies in which it considers the risk of irregularities to be higher.

Not just the lack of a receipt

Other practices were also revealed during the inspection.

In some companies the client received a document, but the amount entered on it did not correspond to the actual value of the transaction.

There have also been complaints about card payments. Particularly for small purchases, some businesses have reportedly refused to accept cards and only accepted cash.

The Cyprus Tax Department reminds that businesses required to accept cards cannot simply refuse such payments. Official regulations also include attempts to establish a minimum purchase value before cards can be used.

For the customer, this means that a message like "by card only from 10 euros" does not have to comply with the applicable rules if the entrepreneur falls into the category covered by the obligation to accept card payments.

Restaurants, souvenirs and tourist attractions

The tax office focuses primarily on activities closely related to the holiday season.

Inspections were carried out, among others, in:

• catering establishments,
• souvenir shops,
• companies offering water sports,
• companies organizing cruises and sea trips.

The action includes primarily Paphos, Ayia Napa, Protaras and Larnaca, i.e. places with particularly heavy tourist traffic in July and August.

The first inspections had already begun. In July, the office inspected 30 companies and found violations in 15 of them.

A few weeks later, inspectors returned to the same places.

After the warning, companies started issuing receipts

The result of the re-inspection was completely different.

Companies that previously received warnings were notified during the next visit by officials they already issued receipts and accepted card payments.

The Tax Department, however, doesn't intend to stop there. These companies will be subject to repeated inspections to ensure they don't revert to previous practices after a period of time.

This is part of a broader campaign to combat tax avoidance, launched with the new tools adopted as part of the tax reform.

First a warning, then the premises may be closed

Detection of a breach does not mean that the premises will be immediately sealed.

According to the latest information, the company first receives a written warning and time to comply with the regulations.

The first call gives 15 days to remedy violationsIf the situation persists, a second warning and another deadline are issued. After this deadline, the entrepreneur may receive an additional five days.

If there is no improvement even then, the Tax Department may proceed to sealing the premises.

The ban is lifted once tax matters are resolved and the appropriate confirmation is received from the tax commissioner. If the business continues to be uncooperative, the premises may be closed for a period of time. up to 20 days.

Now the tax authorities are taking on the biggest debtors

The inspections in resorts are just one element of a larger operation.

The Tax Department has also prepared a list of approximately 500 companies, each with tax arrears exceeding one million euros.

The list includes companies from various sectors, including bookmakers, supermarkets, and car and yacht dealers.

The new regulations allow for the application of a procedure leading to the closure of a company even when tax arrears exceed 20,000 euros.

However, the office wants to start with the largest debtors. Companies from the 500-company list are expected to come under special scrutiny in the coming weeks.

What can a customer do?

For a resident or tourist, the matter is much simpler.

After making the purchase, it is worth it ask for a normal receipt, especially if the seller does not issue it.

If a business obliged to accept cards claims that payment can only be made in cash or tries to impose a minimum amount for card transactions, this situation may also raise concerns.

Importantly, the tax office uses customers' assistance during inspections. Officials ask customers who leave the premises about the documents they received and compare them with actual purchases.

However, the responsibility for failure to issue a correct receipt rests with on the entrepreneur, not on the customer.

Inspections will continue

The intensified action is therefore not a one-off weekend raid.

The Tax Department began its operations in July, increased their scale in August, and has announced further visits to companies that previously violated the regulations.

Particularly tightly controlled are places that attract the largest number of tourists in the summer.

For entrepreneurs, the signal is clear: Receipts, correct amounts, and the ability to pay by card are no longer something the office looks at only from behind a desk. Inspectors check them directly at the premises.

Source: Tax Department of the Republic of Cyprus / Philenews