ACCORDING to reports in the local media, the Cyprus government has appointed PricewaterhouseCoopers (PwC) as an advisor on the formation of a single framework for the taxation of real estate.
Headquartered in London, PwC is a multinational professional services firm headquartered in London. It is the world’s second largest professional services firm, measured by 2013 revenues, and is one of the Big Four auditors along with Deloitte, Ernst & Young (EY) and KPMG.
Work should be completed in 3 months.
Meanwhile, the Cyprus Land and Building Developers Association has presented its recommendations for property tax reforms to the government. These include:
- Individual properties should be taxed separately, based on their estimated value. (Currently, Immovable Property Tax is calculated on the total 1980 values of all the properties registered in the name of the taxpayer).
- The amount of tax should be increased to include the payment of all the other taxes, duties and fees associated with owning a property that are levied by the Inland Revenue, municipalities, and communities together with sewerage charges, which are also based on a property’s value.
- Those who have bought property and lodged their contracts of sale at the Land Registry for Specific Performance should also pay property tax. I.e. those who have yet to receive the deeds to a property they purchased will be liable, rather than the property’s registered owner (the developer).
The Association believes that its proposals will reduce the administrative costs of calculating and collecting taxes, which will benefit both the authorities and taxpayers.
The Association has also proposed a 10% discount on the tax payable, providing it is paid by the deadline, plus a further 5% discount if it is paid electronically.
It has also suggested that interest charged by the Inland Revenue for late payment should be reduced to 4.75% from its present level of 9% to bring it into line with other interest charges imposed by the state for late payment and hopes that the Inland Revenue will introduce payment by instalments.