The national audit service in Cyprus has announced it suspects widespread tax evasion among betting firms.
Cyprus.- The country’s national audit service has said it suspects widespread tax evasion by betting companies on the island due to inadequate coordination between the industry regulator and the tax department.
The findings appear in a damning new report into Cyprus’s National Betting Authority (NBA).
The report says that the audit service uncovered irregularities between betting revenues declared to the NBA with those delivered to the tax department, suggesting that bookies in Cyprus were evading tax.
It reads: “These are differences which in certain cases concern millions of euros. The chairwoman of the NBA informed us that possible differences could be due to the fact that some betting companies show their net income in the financial statements, noting that the NBA and the tax department cooperate when necessary to ensure public interest.”
The audit service said the NBA’s response was unsatisfactory and said it believed the authority was providing the tax department with inadequate information.
It has suggested that Cyprus’s tax commissioner investigate the matter and order the NBA to submit a detailed report on revenues each year.
The NBA licenses six retail betting and nine online betting operators, who must pay 10 per cent tax on betting revenue as well as a 3 per cent contribution tax.
But the audit service also reported that two unnamed foreign betting companies with revenues of €75million had filed no tax returns because they were not registered with the tax department despite appearing on the Cyprus registry of companies.
It also made reference to another company that was not registered as tax resident in Cyprus, but according to the auditor appeared to have a registered office on the island and to conduct board meetings there.
It said it had asked the tax department to investigate whether the company in question should declare part of its income from bets in Cyprus and pay tax on the island.
The report, published online in Greek, also flags up questions over the NBA processes, finding that the NBA had issued or renewed betting licences without receiving the necessary documentation from applicants.
The NBA had also failed to require certain licence holders to increase their bank guarantees to satisfy rules that they match 10 per cent of annual turnover.
The audit service also says the authority had made undue expense claims and had contracted awards without tender.
In other news from Cyprus, last week casinos were given a date to reopen in July.