Cypriot football clubs are facing heightened scrutiny over €30 million in tax and social security debts, with four major teams under the Tax Department’s watchful eye. APOEL, Apollon, Anorthosis, and Ethnikos Achnas have been reminded of their obligations following an ultimatum from the state, as they attempt to settle their long-standing financial responsibilities.
Cypriot football: Tax Compliance Efforts
The Tax Department has been monitoring the compliance of the four clubs since their reintegration into a tax debt payment plan. After a commitment to fulfil their obligations, the clubs have managed to keep up with their July payments, and officials are now awaiting their compliance for this month. The total tax debt owed by these clubs stands at €19.8 million, which represents over 50% of the total outstanding debt owed by 15 football clubs in Cyprus, amounting to more than €30 million.
Actions from the Tax Authority
Sotiris Markides, the Commissioner of Taxation, has made it clear that non-compliance will result in necessary actions, including potential legal measures against current and former officials of these clubs. As per the 2023 payment plan, the clubs aim to settle their debts by 2037, with some already having made significant progress.
Individual Club Repayment Plans
- APOEL: With a total tax debt of €11.6 million, APOEL is making monthly payments of €75,000. The club began the year with €1.8 million in outstanding debts and has since paid €700,000, with a further €200,000 scheduled for payment before the end of September.
- Apollon: Apollon has a total tax debt of €3.8 million and has paid €150,000 immediately, with another €350,000 by the end of April. The club is set to contribute an additional €200,000 by September 1.
- Anorthosis: Anorthosis is working to settle a tax debt of €3.2 million with a proposed immediate payment of €200,000. They were able to clear €125,000 so far this year, and the Tax Commissioner expects them to reach a 62% repayment level by September 1.
- Ethnikos Achnas: Ethnikos Achnas has a total tax debt of €1.2 million, with outstanding payments of €101,000. They are making monthly payments of €8,000 and have proposed a division of their VAT debt into 147 smaller payments.
Challenges with Social Security Contributions
While the tax debts are significant, the real challenge lies with social security contributions, which total €12 million. Unlike tax debts, there is no provision for debtors to be placed on a payment plan for overdue social contributions, meaning these debts must be settled immediately.
Current Status of Social Security Debts
According to reports, 18 clubs have yet to settle their social security debts and are not included in any repayment plan. Only eight clubs have successfully settled these debts, with Ethnikos Achnas being the only one currently part of the overdue contributions plan. The most notable debts are as follows:
- APOEL – €5.4 million
- Apollon – €2.86 million
- Anorthosis – €1.11 million
- AEL – €963,000
- Omonia Nicosia – €57,674
- Omonia Aradippou – €33,466
Legal Consequences for Non-Compliance
The repercussions for failing to meet these financial obligations are severe. Criminal prosecutions have already been initiated against current and former board members of APOEL and Anorthosis, highlighting the seriousness with which the Tax Department is addressing these debts.
Clubs in Good Standing
On a more encouraging note, several clubs are compliant with their tax obligations, including Pafos FC, Omonia Nicosia, AEK, and ARIS, among others. These clubs serve as examples of financial responsibility within the sport.
Looking Ahead
The situation for Cypriot football clubs remains precarious, as they navigate their financial obligations while attempting to maintain their competitive edge. The coming months will be critical as the clubs work to prove their compliance and secure their positions within the tax payment plans.