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Cyprus/March 2014

The Constitution of the Republic of Cyprus in Article 146 grants the Supreme Court of Cyprus exclusive jurisdiction to rule on any complaint that a decision, act or omission of any organ, authority or person, exercising any executive or administrative authority is contrary to any of the provisions of the Constitution or of any law or is made in excess or in abuse of powers vested in such organ or authority or person, including the hearing of tax appeals.

As far as tax cases are concerned, it is estimated that there are currently 5000 pending cases, each taking approximately two years to process, and another 2-2.5 thousand complaints are filed each year, numbers which are unacceptable for a European Union member state in the year 2013.

The passing of a new law for the establishment of an Administrative Court that would take over some of the obligations of the Supreme Court, including tax appeals, has been on the table for years now.  With the number of pending cases reaching unprecedented levels and their trial duration outspreading to deterrent points has led the parliament to approve a bill for the creation of the new administrative court.

The said bill provides that the court will be consisted of five judges who will be based at the Supreme Court building in Nicosia and that its powers will be extended to cover inter alia the tax matters.  It is expected that the establishment of the Administrative Court will significantly speed up the adjudication of cases relating to tax issues.

The government spokesman Christos Stylianides commenting on the above decision said that “…it will modernise the courts, speed up procedures, and help so that justice delivers decisions at the right time, without the extensions that create problems”.

According to the Minister of Justice Ionas Nicolaou, the government is pushing for immediate voting of this legislation, so that the Administrative Court can operate in the coming September.  The Minister went further to explain that the new Court will cut the duration of tax appeal cases by one third which will essentially eliminate those exploiting delays in the current system to avoid paying their taxes.  “Cases would not go on longer than nine months”, he said.

The power to consider tax cases will be transferred to the Administrative court pursuant to an amendment to the constitution.

Taxand’s Take

This new development is certainly a breath of fresh air for legal professionals who have insisted for ages that the judicial system precludes justice to be done as it is fraught with unjustified delays which where undoubtedly exploited by the Cypriot taxpayers in order to postpone their obligations towards the Tax Authorities.

Considerable importance however has to be paid on the volume of obligations to be vested to the newly established Administrative court so as to avoid overloading it with thousand of cases which will for once again get stuck in the bureaucratic system of the Cypriot public authorities.

The proper administration and supervision of the Administrative Court will gravely assist the Supreme Court to put through its obligations and enable the Tax Authorities to receive their receivables in due time.

Antonis Michaelides
Tel : +357 22 699 222
www.eurofast.eu