Second-hand cars stranded at port as tax fraud scheme investigated

Hundreds of cars from the UK have been stranded at Limassol port since the weekend as the customs and tax departments issued a directive on Tuesday forcing buyers to pay a deposit to release their car from customs.

The issue caused mass confusion among those who had already bought the cars, as many were caught off-guard by the directive, and some did not have the money for the deposit, calculated at 25 per cent of the cost of the vehicle.

According to reports, 914 cars have been stranded at the port since the weekend as the directive was implemented without warning.

The tax and customs departments issued a statement saying the fee was imposed after information some individuals were buying cars and selling them in Cyprus as part of a tax fraud scheme.

Speaking to Sigma TV, Nicosia head of the Pancyprian Association for the Import of Cars Pambos Kolokotronis said warnings had been issued on the matter by the tax department since January.

“The department warned buyers they could fall prey to people importing cars without the proper tax paid,” he said.

In their statement on Tuesday, the department said the cars were being imported and resold by individuals not registered with the tax department.

In March, the tax office said that luxury cars were being advertised at lower prices on social media by UK companies to lure private buyers from Cyprus. However, the sellers may be involved in a tax scam.

Cyprus, in cooperation with UK authorities, is investigating cases of traders selling cars to Cyprus who may have avoided paying the VAT in both the UK and Cyprus.

The suspect fraudsters are said to be pulling off the tax dodge through double invoicing.

It is believed that mainly UK dealers issue one invoice to the buyer who uses it to clear the car from customs and register it in Cyprus and a second showing that the car has been sold to a VAT registered company in Cyprus which they present to UK authorities.

In the first case, it is assumed that the VAT was paid in the UK, while in the second case the company supposedly registered in Cyprus will pay the VAT.

The tax office urged the public to be careful with such transactions and to ensure that VAT payment is correctly stated in the sales documents either in the UK or in Cyprus.

One buyer, who contacted the Cyprus Mail, said decision is “ridiculous” as it was made without notifying the buyers, who have had their cars stranded at the Limassol port.

“Surely, it [the directive] should be phased in rather than changed overnight,” the buyer said.

The outraged buyer added his vehicles were in transit when the directive was suddenly sprung on them.

Commenting on communication with customs, the buyer said most of the officers were unaware of the changes and had no information on the fate of the stranded vehicles.

“It is very bizarre,” the buyer said.

In their statement, customs said the buyer can pay the fee or have the car sent to a customs storage facility until the investigation for each vehicle is complete.

Source: Cyprus Mail

DEPUTY minister visit VTTV

VTTV €150 million projects boost for shipping

VTT Vasiliko, the Dutch-controlled international energy trader playing a key role in developing the Vasiliko energy hub since 2014, has two more storage projects in the pipeline worth about €150 mln.

The new projects will also boost the Cyprus maritime sector to benefit from increased cargo traffic, as well as services provided by local companies.

Deputy Shipping Minister Vassilis Demetriades visited the VTTV premises where he reviewed first-hand the ship-to-shore fuelling facilities and was also briefed about the upcoming projects.

“The facilities and services provided at the liquid fuel storage terminal at Vasiliko are of the highest standard. What is more impressive is the ultra-modern jetty for the loading and unloading of tankers, as well as the unique ship-to-ship fuel transfer,” Demetriades said.

The junior minister said the synergies of the energy and maritime sectors are evident at Vasiliko, offering great potential to the Cyprus economy.

VTTV’s CEO, George Papanastasiou, said the terminal was the biggest foreign direct investment in energy infrastructure that has a direct impact on shipping.

It was delivered in November 2014 by J&P for €300 mln. The company employs 66 people, up from 25 when it started.

VTTV owns the state-of-the-art jetty in the Vasiliko port, at proximity to the country’s power plants.

It can be adapted for the upcoming FSRU terminal that will provide natural gas for consumption by the local energy producers, primarily the Electricity Authority of Cyprus.

The project, a subsidiary of international oil storage terminal operator VTTI B.V., 50% of which is owned by Dutch Vitol, features 28 tanks with a total storage capacity of 545,000 cubic metres of core fuel (diesel, gasoline and jet fuel) a deep-water marine jetty as well as road tanker loading facilities in phase one.

“The terminal, in conjunction with the island’s strategic location near the Suez Canal, places Cyprus on the map of these fuel transports,” Papanastasiou said.

Papanastasiou told the Financial Mirror that the two projects underway are a small private LNG terminal that is earmarked to cost €15-20 mln, able to serve the local market and also exports to nearby markets, such as Lebanon.

The second is a larger project that is expected to cost some €120-130 mln and will store the Euro-spec output of a major regional refiner for supply to the European markets.

He said VTTV storage is at near-capacity and could not offer its service to oil majors when the price of US crude turned negative in April when the price of the benchmark West Texas Intermediate (WTI) fell as low as minus $37 a barrel.

VTTV is also part of the H4E Gasfuel consortium for the design and construction of a floating storage regasification unit (FSRU) in Cyprus.

The consortium includes Norway’s Hoegh LNG, which has submitted a proposal for the installation of an FSRU in Cyprus by next year.

The consortium aims to provide liquefied natural gas to Cyprus as soon as possible, which will reduce electricity costs for local consumers as well as gas emissions and gas emissions taxes.

With its proposal, Hoegh LNG “offers Cyprus the installation, within the first quarter 2021, of an FSRU at Vasiliko and a pipeline to transport the gas to the EAC’s power plant and potentially other users.”

It said the proposal “does not in any way interfere with the government’s plans, while the Cyprus government will be able to save over €100 mln per year from 2021 onwards, by switching power generation to burning natural gas from heavy fuel oil.”

Cyprus can also achieve lower emissions from power generation, resulting in lower cost while the economy will benefit significantly from lower electricity production cost, said Hoegh LNG in a recent statement.

Source: Financial Mirror