Tax News Update    Email this document    Print this document  

October 20, 2022
2022-1589

Cyprus Tax Authority issues clarification regarding Competent Authority Agreement with United States for exchange of CbC reports

  • The Cypriot Tax Department has publicly announced that the bilateral Competent Authority Agreement (CAA) for the exchange of Country-by-Country (CbC) reports between Cyprus and the United States (US), which is still under negotiation, is expected to be effective for Reporting Fiscal Years (RFYs) starting on or after 1 January 2022.
  • Accordingly, a Cypriot Constituent Entity (CE) whose Ultimate Parent Entity (UPE) is a US tax resident, will have an obligation to proceed with the filing of the CbC report locally in Cyprus for its RFY ending on 31 December 2021, even if a CbC report has been or will be submitted in the US.

On 13 October 2022, the Cypriot Tax Department publicly announced that the bilateral CAA for the exchange of CbC reports between Cyprus and the US, which is still under negotiation, is expected to be effective for RFYs starting on or after 1 January 2022.

Therefore, the secondary filing mechanism for a Cypriot CE of a multinational enterprise group with a US tax resident UPE will be triggered for RFYs starting on or after 1 January 2021, but before 1 January 2022.

Accordingly, a Cypriot CE whose UPE is a US tax resident, will have an obligation to proceed with the filing of the CbC report locally in Cyprus for its RFY ending on 31 December 2021, even if a CbC report has been or will be submitted in the US.

The Cypriot Tax Department has further noted that in cases where notifications have already been filed in Cyprus by Cypriot CEs for RFYs starting on or after 1 January 2021 and before 1 January 2022, such notifications must be revised accordingly if they are affected by the announcement. If such notifications are revised before 31 December 2022, no penalties will be imposed.

___________________________________________

For additional information with respect to this Alert, please contact the following:

Ernst & Young Cyprus Limited, Limassol

 

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

 

Copyright © 1996 – 2024, Ernst & Young LLP

 

All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.

 

EY US Tax News Update Master Agreement | EY Privacy Statement