How to Settle Tax Debts with the Cyprus Tax Department While Living in the U.S.
Introduction
Many Cypriots living in the United States maintain real estate, inheritance rights, or prior business activity in Cyprus.
If you owe taxes to the Cyprus Tax Department, these debts can be legally resolved remotely — through structured arrangements, legal representation, or formal appeals.
⚖️ Legal Framework
Tax debt settlements are governed by:
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Cyprus Tax Administration Law (Law 4(I)/2014)
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Circulars issued by the Tax Commissioner
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Internal guidelines on installments, interest, and administrative appeals
What Types of Tax Debt Can Be Settled?
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Income tax
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Special Defence Contribution (SDC)
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Capital Gains Tax (CGT)
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VAT or rental-related income
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Administrative penalties for non-filing
Methods of Settlement
Cyprus allows:
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One-time (lump sum) payment with possible penalty/interest waivers
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Installment plans of up to 60 months
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Administrative arrangements (compromise agreement)
Prerequisites:
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All past tax returns must be filed
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You may be asked to explain inability to pay in full
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A formal request must be submitted to the Tax Office
Can It Be Done Remotely?
Yes — through:
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Power of Attorney to a Cyprus-based lawyer
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Submission of documents via email or courier
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Payments via JCC Smart, SEPA transfers, or SWIFT wire
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All communication and monitoring handled by your legal representative
⚠️ Risks of Inaction
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Monthly accumulation of interest and administrative fines
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Risk of asset restrictions or delays in title transfers
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Tax clearance certificates will not be issued if debts remain unpaid
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Enforcement measures may include withholding refunds or court proceedings
⚖️ Administrative Tax Appeals in Cyprus
If you disagree with a tax decision, bill, or denial of payment relief, you have the legal right to file an administrative appeal.
When Can You Appeal?
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Incorrect tax assessments (e.g., taxation on non-taxable income)
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Unjustified penalties or excess interest
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Rejection of payment plans or waivers
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Errors in residency classification or income characterization
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Unapplied tax credits or duplicate charges
Legal Basis
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Articles 45–52 of the Cyprus Tax Administration Law (Law 4(I)/2014)
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Internal policy of the Tax Department
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Appeals must be filed within 60 days from the notice date
Appeal Procedure
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Submission of a written appeal identifying the contested issue
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Detailed evidence and justification attached
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Registered with the Tax Commissioner’s review department
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Decision is issued within 6 months
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If rejected, you can appeal to the Cyprus Administrative Court within 75 days
✅ What You Can Achieve:
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Reduction or cancellation of taxes and penalties
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Approval of a payment arrangement
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Refunds or credit adjustments
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Recognition of non-resident tax status (to exempt from SDC or other charges)
How E. CHATZIDIMITRIOU LLC Can Help
Our law firm handles everything for you, including:
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Reviewing your debt and payment history
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Filing past due tax returns
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Drafting and submitting settlement requests or appeals
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Negotiating directly with the Tax Department
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Representing you before the Administrative Court of Cyprus, if necessary
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Obtaining tax clearance certificates upon settlement
All services are performed remotely, under a valid Power of Attorney.
Contact Us
Website: www.hatzidimitriouvirtuallaw.com
Email: info@hatzidimitriouvirtuallaw.com
U.S. Phone: +13474034789
You don’t need to return to Cyprus to settle your tax debts — we’ll handle the process securely from start to finish.