Under the scope of the Assessment and Collection of Taxes Laws of 1978 to (No 3) of 2021, on 18 June 2021 the new Decree establishing the requirement to accept payments by cards and in electronic forms has been issued (Issue No. 5548)
Which businesses are obligated to comply with the Decree?
Such businesses include, but are not limited to, hospitals, kiosks, beauty salons, hospitality, financial services, legal services, merchant services and etc. The officially approved list contains eighty seven different categories of the businesses.
Which businesses are NOT obligated to comply with the Decree?
The list includes such categories of businesses as manufacturing, electricity production, water, transport, film production, radio and IT programming.
What are the reasons behind the legal introduction of card payment and electronic transactions?
• It is very well – known that many businesses preferred to accept cash rather than card payments in order to avoid taxes. Therefore, one of the reasons is to abolish tax avoidance and “shadow ecomony”.
• Second reason is an elimination of fraudulent acts, since there is always risk to accept counterfeit money (fake money).
• Another significant reason is connected to the consumer protection from the theft or their financial losses. In other words, customers who used to have with themselves large amounts of money, were always at the risk of being robbed, whereas a stolen credit card cannot be used without a pin – code for the amounts higher than fifty euro.
• Furthermore, another benefit can be the time efficiency and provide customers with the potential abilities to track their payments and keep their expenses organized.
What is the deadline to comply with the obligation to accept payments by card for the businesses?
Businesses are obligated to comply with the provisions of the Decree within three months from the date of its issue.
Recently opened businesses which will start their function after two months from the date that the Decree has been issued, are obligated to act in accordance with the Decree within four months from the date of its issue.
What will happen if some businesses will not compose with the provisions of the Decree?
In case, if there is a non – compliance with the obligations established by the Decree, there will be an administrative fine for businesses in the amount up to two thousand euro by the Cyprus Tax Department.
To conclude, the businesses are required to establish wireless and mobile terminals as a payment method as well as distance sales, which do not require physical presence. Nonetheless, it does not mean that the businesses cannot operate with cash, but it is mandatory to in addition to that offer the alternative card payments. Those, who will disobey the new requirements, are subject to the administrative fine and investigations by the Cyprus Tax Department.