Specifically, in five cases that received Cypriot citizenship during the period 2016-17 through the Naturalization Program and were examined by the Audit Office, it turned out that investors were allowed to use a low VAT rate of 5% in transactions amounting to approximately € 14 000 000, resulting in them being given thousands of euros, as the average speed is 19%.
Simultaneously, and following a European directive, this relief can only be applied within a social context and not to multimillionaires.
Simultaneously, the government is not allowing the Audit Office to consider other naturalization cases, creating a democratic deficit, as there seem to be gray areas between three powers around the Program.
According to the Service, the Regulations on Honorary Naturalization for Reasons of Public Interest and Naturalization of Foreign Entrepreneurs or Investors should be amended so that the written agreement between the investor and the Service Provider, provided for reasons of transparency and due taxation, is submitted together with the of the investor in the Ministry of Interior.
"We as the Audit Office believe that the Program is an investment and therefore the law that grants VAT rate relief to young couples to multimillionaires cannot be applied, " the Audit Officer and Spokesperson of the Audit Office told " Haravgi, "Marios Petridis.
Mr. Petridis explained that a relevant European directive, the EU's Common Value Added Tax System, explicitly states that Member States can only introduce a reduced VAT rate in specific cases.
"These cases concern: the delivery, construction, renovation, construction, and conversion of houses within a social policy framework. Therefore, it is evident that the investments of wealthy foreign investors do not fall within this framework ".
He pointed out that the Ministry of Interior, under the pretext that all cases are before the four-member committee (the Attorney General's committee for the control of naturalizations) for examination, did not allow the Audit Office to access the files.