The Tax tribunal: The new VAT dispute resolution mechanism

The most recent amendment of the Cyprus VAT Law, effective as of the 7th of July 2017, introduces the special Tax Tribunal which is now an option available to taxpayers for challenging VAT Commissioner’s decisions under a new fast track procedure.   
 
Summary of major changes brought by the amending law 86(I)/2017:
  • The right to object to the Commissioner’s decisions to the Minister of Finance is abolished.
  • Taxable persons have a right to lodge an appeal to the Tax Tribunal.
  • The preconditions to be satisfied for the Tax Tribunal to examine the appeal are the following:
    • The taxable person has submitted the required documentation and supporting evidence.
    • The required VAT returns prior to the dispute have been submitted and VAT payable has been paid or arranged to be paid.
    • The non-disputed assessed VAT amount has been paid or a relevant guarantee has been given to the Tax Tribunal following its request.
  • The Tax Tribunal may:
    • Annual or confirm the Commissioner’s decision.
    • Amend the Commissioner’s decision.
    • Issue a new decision replacing the Commissioner’s decision.
    • Refer the case back to the Commissioner with instructions to perform specific actions.
  • The Tax Tribunal issues its decision within 1 year from the submission of the appeal.
  • Currently, the VAT Commissioner’s decisions may be challenged by:
    • Filing an objection to the Tax Commissioner within 60 days of being notified about the VAT assessment.
    • Major VAT issues subject to objection are the registration and deregistration from VAT, VAT refunds, input recovery and apportionment, determination of tax, imposition of Additional VAT and imposition of Penalties and Interest. 
    • Submitting an appeal to the Tax Tribunal within 45 days of being notified about the Commissioner’s decision.
    • Major VAT issues subject to an appeal are the imposition of VAT on goods and services, input VAT recovery and VAT assessments.
    • Submitting an appeal to the Administrative Court within 75 days from the date of receiving the notification of Tax Commissioner’s decision or from the date of the Tax Tribunal’s decision.
    • Appealing the Administrative Court’s decision to the Supreme Court acting as the final appellate Court.
    • The right to lodge an appeal to the Tax Tribunal for specific VAT matters may be exercised before submitting an appeal to the Administrative Court.
    • The right to appeal to the Administrative Court against a decision of the Tax Tribunal is only available to the taxable person and not the tax authorities.
For further information and advice, please contact our partner, Ms. Maria Raphael at maria@frangoslaw.com.
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