Municipalities of Northern Cyprus decide whether to restructure residents' tax debts

The authorities of Northern Cyprus have adopted a new Decree with the force of law, allowing residents to restructure their tax and municipal fee debts for 2023 and earlier periods. The document was published in the Official Gazette on July 28 and allows applications to be submitted until December 30, 2025.

According to the decree, obligations such as income tax, corporate tax, VAT, property tax, as well as various municipal fees are subject to restructuring. However, a key condition for implementing the new rules is approval by local municipal councils. Each community decides independently whether to participate in the program.

The reaction of municipalities has been mixed. Some city councils have already declined participation, while others have taken time for discussion. For example, in Gönyeli and Alayköy, the mayor stated that the council had previously rejected a similar proposal and has not yet revised its position. In Lefke and Beyarmudu, the mayors noted that a decision has not yet been made, but expressed concern that the restructuring may create unfairness toward conscientious taxpayers.

In Güzelyurt, authorities promise to consider residents' opinions. If there is a corresponding request from the public, the issue will be put to a vote by the municipal council. In contrast, in Gazimağusa, the initiative is supported and is planned to be discussed at the upcoming meeting.

Meanwhile, in Kyrenia, the authorities stated that they have not previously used such mechanisms and currently do not plan to introduce this system.

Thus, despite the government's general course to ease the tax burden, the decision on whether to apply debt restructuring remains at the discretion of local authorities. Residents are advised to follow the decisions of their municipal councils and submit applications within the established deadlines if necessary.