27/03/2015 07:29
Cypriot entrepreneurs proceed to representations towards competent authorities in Athens in order to avoid flat implementation of a new law that requires preventive tax 26% to transactions of Greek business with Cypriot business.
Because Cyprus is considered to have a favorable tax regime, business people argue that the new law recently passed by the Greek parliament makes all transactions "suspicious" for tax evasion and imposes the tax until otherwise proven.
According to Law 4321/2015, and in particular Article 21, paragraph 1, any business that buys goods or receives fuel or raw materials from a company located in Cyprus, Bulgaria, Qatar and Ireland, countries which have privileged tax regime, ie they have a tax rate below 13%, should pay a tax of 26% on the cost.
The tax will be refunded without any penalty within twelve months if the company proves to the tax authorities that the transaction is genuine.
This is causing reaction among Cypriot businessmen, who raised the matter to the president of the Greek parliament Zoe Konstantopoulou, during her visit to Cyprus.
In a letter sent to the Greek authorities, the Cyprus Chamber of Commerce and Industry (CCCI) maintains that this legislation is not fair for trading companies established in Cyprus, considering all transactions suspicious of tax evasion.
“The implementation of this legislation by the tax authorities of Greece treated companies based in Cyprus and active in many markets, with dozens of staff, investments and significant turnover, as vehicles of tax-evasion or tax-avoidance” it is noted.
All this time, said chairman of CCCI, Phedias Peilidis, “we hoped that there would be a way for a clear distinction so that the tax-avoidance or tax-evasion is addressed effectively”.
“With this new provision, all transactions with Cypriot companies are addressed as “suspicious” and the expenditure of the companies established in Greece from their transactions with the Cypriot companies are treated by default as tax-evasion or tax-avoidance”, he highlighted.
The provision provides for the imposition of a deduction of 26% in each invoice, which will be paid to the state and the taxpayer will have the option within three months to try to convince the tax authorities that the invoices correspond to actual transactions.
The CCCI expresses doubts that the amounts retained will be reimbursed in a reasonable time.
As noted, a possible solution could perhaps be given by the new ministerial decrees so as to separate the businesses imposed with 26%, depending on how likely the acts with Cyprus are actually triangular transactions for tax avoidance.
The CCCI requests the intervention of the Greek authorities to tackle the problem right from the begginning so that the new law has real results.
The Chamber wants to arrange a meeting in Athens to discuss the issue.
The letter was also sent to finance minister, Harris Georgiades.
Because Cyprus is considered to have a favorable tax regime, business people argue that the new law recently passed by the Greek parliament makes all transactions "suspicious" for tax evasion and imposes the tax until otherwise proven.
According to Law 4321/2015, and in particular Article 21, paragraph 1, any business that buys goods or receives fuel or raw materials from a company located in Cyprus, Bulgaria, Qatar and Ireland, countries which have privileged tax regime, ie they have a tax rate below 13%, should pay a tax of 26% on the cost.
The tax will be refunded without any penalty within twelve months if the company proves to the tax authorities that the transaction is genuine.
This is causing reaction among Cypriot businessmen, who raised the matter to the president of the Greek parliament Zoe Konstantopoulou, during her visit to Cyprus.
In a letter sent to the Greek authorities, the Cyprus Chamber of Commerce and Industry (CCCI) maintains that this legislation is not fair for trading companies established in Cyprus, considering all transactions suspicious of tax evasion.
“The implementation of this legislation by the tax authorities of Greece treated companies based in Cyprus and active in many markets, with dozens of staff, investments and significant turnover, as vehicles of tax-evasion or tax-avoidance” it is noted.
All this time, said chairman of CCCI, Phedias Peilidis, “we hoped that there would be a way for a clear distinction so that the tax-avoidance or tax-evasion is addressed effectively”.
“With this new provision, all transactions with Cypriot companies are addressed as “suspicious” and the expenditure of the companies established in Greece from their transactions with the Cypriot companies are treated by default as tax-evasion or tax-avoidance”, he highlighted.
The provision provides for the imposition of a deduction of 26% in each invoice, which will be paid to the state and the taxpayer will have the option within three months to try to convince the tax authorities that the invoices correspond to actual transactions.
The CCCI expresses doubts that the amounts retained will be reimbursed in a reasonable time.
As noted, a possible solution could perhaps be given by the new ministerial decrees so as to separate the businesses imposed with 26%, depending on how likely the acts with Cyprus are actually triangular transactions for tax avoidance.
The CCCI requests the intervention of the Greek authorities to tackle the problem right from the begginning so that the new law has real results.
The Chamber wants to arrange a meeting in Athens to discuss the issue.
The letter was also sent to finance minister, Harris Georgiades.
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