Guilty of tax evasion unless you prove otherwise

IN virtually all civilised countries, the burden of proof rests with the person or organisation that lays charges against you; in other words, you are considered to be innocent until you have been proven guilty.

However in Cyprus, the reverse is true when it comes to paying your Property Transfer Fees at the Land Registry.

Using its discretionary powers to reassess Property Transfer Fees, the Land Registry relies on historical data to assess the market value of a property – and it will use that data as the basis for calculating the transfer fees to be paid by the purchaser.

The reason for the Land Registry’s reassessment, we are told, is that vendors and purchasers often under-declare the price of a property in efforts to defraud the state of much-needed tax revenues; by under-declaring the price, vendors reduce the amount of Capital Gains Tax they pay, while purchasers reduce their Property Transfer Fees. Of course for this fraud to take place both the vendor and the purchaser have to collude to deceive the authorities.

Source: Cyprus-Property-Buyers.com