The intensive audits by the Tax Department in recreation centers have side effects and more specifically provoke the reaction of their official expressive body.
According to reliable information from "F" and which cannot be disputed, since the implementation of the voted bills for tax reform and within a period of six months, officials of the Department have carried out 1,200 on-site inspections in recreation centers.
The object of the tax audit, of course, is to determine whether the owners of the businesses proceed with the issuance of receipts and invoices and, by extension, whether they comply with the legislation and do not evade taxes.
These inspections have caused dissatisfaction among recreation center owners. In the previous 24 hours, "F" received complaints from circles close to the industry, which took official form yesterday.
The reason for the announcement of the Pancyprian Association of Leisure Center Owners (PASIKA), through which its positions on the new data are expressed. As can be seen from the content of the announcement, the point of friction is the methodology that the Tax Department requires to be adopted by the owners for the audits.
The Point of Friction
Owners of recreation centers express dissatisfaction with the requirement to use a specific electronic payment terminal to issue receipts.
This is the Tax Electronic Marking Mechanism (FIMS) provided for by law. It is an electronic device that is connected to the receipt or invoice issuance system of a business and creates a unique electronic marking for each document.
The FIMS, as pointed out by those familiar with the purpose of its use, allows the auditors of the Tax Department to check the correctness of the documents and identify possible irregularities.
However, PASIKA argues that this requirement not only burdens each company with €550, but they indirectly characterize this system as outdated ("legislation that remained inactive for 17 years"), indicating the use of more modern methods (cloud).
The demands
PASIKA calls for "an objective evaluation of newer technological proposals, such as cloud systems, which", according to the Association, "provide the same guarantees to the state at a much lower cost".
It also demands the suspension of the process, but also assurance "that no administrative fines or sanctions will be imposed on businesses" until a solution is found to the whole issue and there is an agreement on the invoicing machine. In addition, it calls for an amendment to the legislation.
Meeting with Markides
PASIKA has already sent a letter last week to the Commissioner of Taxation, Sotiris Markides, in order to bring before him the issues that arise. There was an immediate response and the meeting has been arranged, with our information stating that it will take place at the end of next week.
Compatibility Issue
"F" contacted the Tax Commissioner yesterday about the issue, asking for clarifications on what PASIKAS raises. Mr. Markides told us that the Tax Department "implements the legislation" and that it acts within the framework of its responsibilities.
He also explained that the Department is willing to listen to the positions of PASIKAS, "which is why we immediately agreed to meet with its representatives", as he characteristically stated.
Regarding the controversial issue with the Tax Electronic Marking Mechanism (FIMS), Mr. Markides reiterated that the Department he heads applies exactly what is provided for in the legislation.
In fact, as he explained to us, the competent officials of the Department, experts in such technologies, have already examined what PASIKA sets and have found that the cloud system is not compatible and does not allow the recording of receipts and invoices, nor effective control.
Mr. Markides, following our question, clarified that in cases where officials of the Tax Department found that center owners had a cloud system, the latter were given a deadline to comply. He clarified that the Department "did not act abusively".
Guidelines for discretion
Although PASIKA in its announcement yesterday maintains a strictly responsible attitude, nevertheless its members in the previous days had expressed concern about the fact that the audits are large in number and take place on weekends, which - as they claim - means that there are also increased overtime compensations for the officials of the Tax Department. At the same time, the answer given by the Tax Department is that the audits are not done blindly, they are within the framework of the legislation, while it is indicated that it is perfectly reasonable to have an audit during the weekend based on the turnover of the businesses. It is emphasized, at the same time, that the officers of the Department are instructed to be particularly discreet in the exercise of their duties.
Letter to the Parliament for legislative regulation - "It fully supports the fight against tax evasion, but legislation must keep pace with technological progress"
The Pancyprian Association of Leisure Center Owners (PASIKA) in a memorandum to the members of the parliamentary Committee on Finance and Budget, signed by its general secretary, Fanos Leventis, requests a legislative regulation to amend the existing legislative/regulatory framework in relation to the "interconnection of cash registers".
The memorandum obtained by "F" and presented in this publication states the following: "The Pancyprian Association of Leisure Center Owners (PASHIKA) wishes with this memorandum to put before you an extremely urgent issue that threatens the livelihoods of the businesses of our Sector, due to the unilateral and technologically anachronistic application of the legislation on the interconnection of cash registers with the Tax Department with the existing legislative and regulatory framework, including 224/2010.
The relevant provision remained inactive for seventeen whole years. Today, the State demands its immediate implementation, forcing businesses to install a specific, outdated technological solution at a disproportionate financial cost, which amounts to approximately €550 per point of sale (POS).
It is noted that alternative, modern proposals from technology providers (such as cloud-based software) have already been submitted to the Tax Department. These solutions fully ensure the integrity of data and tax control, but without burdening businesses financially. The refusal to accept them with the sole excuse of the "letter of the existing law" is a brake on the market.
Therefore, we ask for the immediate intervention of the Parliamentary Committee on Finance for the following:
1. Ex officio Examination of the Matter: The immediate registration and discussion of the matter in your Committee, by summoning the Tax Commissioner and the bodies involved, in order to analyze the technical and financial data.
2. Legislative Amendment (Technological Neutrality): The promotion of limited legislative amendment, so that the law does not impose a specific type of machine, but allows any compatible, modern digital solution ensures obligations towards the state.
3. Establishment of a Transitional Period: To exert pressure for the immediate suspension of the imposition of any fines or sanctions on businesses, until the examination of alternative solutions and the necessary legislative regulation are completed.
P.A.S.I.K.A. fully supports the fight against tax evasion, but legislation must keep pace with technological progress and protect the viability of businesses from unnecessary costs, especially in the midst of enormous sustainability difficulties. We are at your disposal to present our positions to your Committee."
