Tax authorities who investigated owners of luxury cars have detected blatant incidents of tax evasion.
The Inland Revenue Department asked individuals who bought luxury cars in 2010 and 2011 to explain where the money came from.
Most of the vehicles were high-powered cars for a few, such as Ferrari, Lamborghini, Porsche, Bentley, Aston Martin and some luxury four-by-four vehicles such as Range Rover, BMW and Μercedes.
The most expensive car checked by the Inland Revenue Department for tax evasion had a purchase price of €235,000 according to documents secured by customs.
The president’s bullet proof car, purchased by the Christofias government with a purchase price of some €450,000 was exempted from the investigation.
In 157 cases, Inland Revenue asked for justification as to how the luxury cars were financed – 77 involved individuals and 80 concerned companies.
Officials established that in the case of two luxury four by four vehicles worth more than €80,000 the registered owners were two women aged 73 and 83 who were not even in a position to drive.
In 49 cases where the total purchase price was €5.2 million, their owners refused to submit the information requested by the Department of Inland Revenue and their case has been sent to court.
They will also be taxed with the highest co-efficient which is 35% on the acquisition price of each car.
Once the grace period had expired, the tax authorities proceeded with an initial check of all cases and where appropriate asked the owners to submit more information for the tax review.
Where the additional documents were considered not to reflect the income that car owner’s have been declaring to Inland Revenue, instructions were given to district tax offices to proceed with a further investigation through a capital statement or an examination of accounts.
Capital statements are required only from individuals not companies and cover a period of up to six years prior. Company accounts concern both companies and individuals with annual income above €70,000.
The initial tax review was completed in September 2012 and instructions were given to district tax offices to proceed with a further examination of 77 individuals and 80 companies.