They are not issuing receipts. Businesses in Cyprus are facing temporary closure.

Some businesses in Cyprus have received a second warning from the Tax Department after repeated inspections revealed they were still failing to issue receipts or invoices to customers. The office is approaching the first application of regulations allowing businesses to temporarily close and seal their premises.

According to "Philenews," the letters were sent to businesses offering hairdressing, massage, and water sports services, among others. Since July, approximately 700 inspections have been conducted, during which 420 businesses were found not to be issuing the required sales documents. Most subsequently complied with the regulations, but some continue to violate them.

Second warning for entrepreneurs

The inspections primarily targeted tourist destinations. Officials visited restaurants, souvenir shops, kiosks, hairdressers, parking lots, and companies organizing sea trips, among other places.

The issuance of receipts and invoices, as well as the acceptance of card payments, were checked. According to the newspaper, after the first warning, businesses had 15 days to correct the irregularities. However, follow-up visits revealed that not all businesses had changed their methods.

Among those still not issuing receipts were the owner of braiding and hair extension shops in seaside towns, as well as a barber, a masseur, a café owner and a water sports entrepreneur.

After the second warning, they were given another ten days to bring their operations into compliance.

The company's closure is preceded by three warnings

Sealing of premises does not occur without prior notice. The law provides for three notifications, and the entrepreneur may present his or her position before the final decision is made.

The first and second notices must provide at least ten days to remedy the violations. For the third notice, the office allots five days for submitting written explanations. The first deadline of 15 days described by the newspaper is therefore longer than the statutory minimum.

The decision must be published in the Official Gazette of the Republic of Cyprus. Its implementation cannot take place earlier than ten calendar days after the decision is served on the entrepreneur or the relevant notice is posted.

The premises may be closed for up to 30 days

The initial suspension of operations may last up to ten days. If violations are not corrected, the office may extend the closure for a further period, not exceeding twenty days.

Once the requirements have been met and the office has issued an appropriate certificate, the decision ceases to apply.

The regulations provide for the possibility of closing a business for, among other things, failing to issue required receipts or invoices, issuing incorrect documents, and obstructing a tax audit. Refusal to accept card payments was also subject to inspection, but it was not listed as a separate ground for closure in this article of the law.

Tax arrears can also result in closure

The mechanism also covers tax arrears exceeding €20,000, including applicable additional liabilities. This includes income tax, VAT, capital gains tax, and the special defense contribution.

From 2027, the basis for applying the measure will also be failure to submit the required number of declarations: at least two tax declarations, twelve monthly declarations on withheld taxes and contributions, or three VAT declarations.

Conducting business despite a ban or arbitrarily removing security measures from premises may result in a fine of up to €30,000, imprisonment for up to two years, or both.

Most of the audited companies changed their practices

According to "Philenews", most entrepreneurs started issuing receipts, installing cash registers and accepting card payments after the warning.

The 60% figure applies to companies covered by the inspection campaign described above. It does not mean that this percentage of all companies in Cyprus are violating the regulations.

Inspections are to be continued in the coming months, also outside standard office hours.

Sources: Philenews; CyLaw — Article 32A of the Tax Assessment and Collection Act.