Cyprus businesses are legally obligated to accept payments with plastic money if they want to avoid being slapped with a hefty fine by the tax authorities.
Retail businesses not accepting payments via credit card will be fined up to €2,000, said the Tax Department on Tuesday.
According to legislation approved by Parliament a month ago, people or businesses engaging in economic activity must accept payments with credit cards in addition to cash.
The legislation was drawn up by the Finance Ministry back in October last year in an effort to encourage electronic payments and enhance tax control.
Demand for seamless payments has increased with the outbreak of coronavirus as people are more reluctant to make payments with cash due to health concerns.
As expected, the Finance Minister is to issue a decree obliging companies to install a POS terminal in order to accept payments by credit card.
A circular issued on Tuesday by Tax Commissioner Yiannis Tsangaris clarifies that after the issuance of the relevant decree, his Department will follow up with regular inspections to determine whether the legislation is applied.
If a business is found violating the law, the official carrying the inspection will submit a report to the Tax Commissioner, who within 15 days will have to decide whether to impose a fine or not.
In the case, a fine is issued, but the business fails to pay, the case will be referred to a civil court.
According to the circular, the administrative fine will be reduced by 50% if the offending party pays the fine or submits to the Tax Officer an invoice that proves the purchase of a POS terminal within 30 days.