Auditor General Finds Flaws in Tax Department's Investigation of Businessman's Property Sale

The Auditor General has criticized the Tax Department for its inadequate investigation into the sale of a property belonging to a well-known businessman during the period of 2015-2017. According to the report, there were warning signs indicating potential non-compliance with the law, but the Tax Department did not properly examine the relevant transactions.

The report mentions an unusual revision of property sale agreements with a significantly reduced price, the non-inclusion of third-party trademark usage rights in the sale price, and a possible artificial inflation of property construction costs.

Furthermore, the Auditor General recorded the issuance and redemption of shares at unusual prices, significant transactions between related parties, exemption from capital gains tax, application of disproportionate interest rates on debit balances, increased impairment of bad debts, and delays in the examination and imposition of taxes.

The Auditor General notes that the property ended up in the ownership of the immediate family of the original owner through a cycle of actions and transactions. Also, funds of approximately €62 million were identified as being raised through the Cyprus Investment Programme.

The Auditor General recommends that the Tax Department proceed with a tax investigation of all related companies of the specific group and, if deemed necessary, inform ΜΟΚΑΣ.