The Tax Office on Thursday urged the public to be particularly careful in purchasing second hand cars, particularly from the UK.
It said that luxury cars are being advertised on social media by UK companies promising delivery to private buyers in Cyprus.
The Tax Office in cooperation with UK authorities is investigating cases of traders who have delivered a large number of cars to buyers in Cyprus for which there are serious indications that VAT has not been paid in the UK and/or Cyprus.
The possible fraud involves the avoidance of VAT payments through double invoicing — one issued to the buyer who uses it to clear the car from customs and register it in Cyprus (without VAT as it is considered to have been paid in the UK) and the second showing that the car has been sold to a VAT registered company in Cyprus, without the payment of VAT.
The public is urged to be particularly careful with its transactions and to make sure that VAT is correctly stated either in the UK or in Cyprus, otherwise there is a serious possibility that buyers may find themselves under investigation for criminal offences and be called upon to pay the required VAT.