Cyprus tax authorities to gain the right to freeze shares of debtors

The Ministry of Finance of Cyprus has prepared a draft law granting tax authorities the right to freeze company shares if a taxpayer has unpaid taxes exceeding 100,000 euros and the debt remains outstanding for 30 days after the due date.

Under the draft law, the Tax Commissioner may seize shares in a company’s share capital as security for the debt. A notice with the date and signature is entered into the companies register. After the seizure is imposed, the taxpayer has 30 days to file an objection, which the Commissioner must review within one month.

The Commissioner is given 15 days to issue an order to lift the seizure after the debt has been paid. The tax authorities will also be able to take measures before the completion of administrative and judicial procedures in order to improve the efficiency of collection.

The draft law also introduces an alternative mechanism: a taxpayer with a debt exceeding 10,000 euros may request to transfer property to the state to settle the debt; the decision is taken by the Council of Ministers upon the recommendation of the Minister of Finance. The transferred property must be free of encumbrances, and its assessed value must be within 20% of the total amount of the debt.

Data from previous years show that existing tools have had a limited effect: in 2024, bank accounts totaling 1.39 million euros were frozen for 337 taxpayers, and in 2024, seizures were imposed on the property of 5,293 debtors with a total debt of 442 million euros.