Country by Country Reporting Decree issued!

Cyprus Issues Country by Country Decree end of 2016

The Ministry of Finance of the Republic of Cyprus has issued at the end of year 2016 a Decree pursuant to Article 6 (16) of Assessment and Collection of Taxes Law on Country by-Country Reporting (CCR).

This Decree as per European Union Law requires Cyprus as a member of the EU to implement the CCR obligation at a national level in accordance with the recommendations of the Organisation for Economic Co-operation and Development (OECD) Base Erosion and Profit Shifting (BEPS) Action 13 on CCR.

The Decree requires for all entities which are tax residents in Cyprus being part of the Multinational Enterprise Group with over three quarters of a million of group revenue to comply with CCR requirements.

Country by Country Reporting Decree issued:What are the CCR requirements?

All entities which are tax residents in Cyprus and are the ultimate parent entities of the Multinational Enterprise Group with over three quarters of a million of group revenue must prepare a CC Report. Alternatively, any other group entity which is residing in Cyprus and it is not the ultimate parent entity may be appointed as the surrogate parent entity in which case will have to prepare and submit the CC report.

This would be the case also if the ultimate parent entity is not resident in Cyprus and has no obligation to file a CC report in its country of residence.Cyprus has signed the OECD multilateral competent authority agreement (MCAA) on the exchange of CC reports.

Furthermore, any CC report which is submitted in Cyprus will be exchanged with the tax authorities of those jurisdictions to which that Group operates.  This would be the case provided that these jurisdictions have also signed the agreement.The Decree as part of its requirements provides that any Cypriot Entity which is part of the Multinational Enterprise Group shall notify the Cyprus tax authorities with the reporting entity identification number no later by the latest the last day of the Reporting Fiscal Year of such Group.

The Decree provides that the deadline for filing the notification for the first CC report has been extended to the 20 October 2017. Should an entity fail to comply with the above requirements then will be subject to an administrative penalty which is expected to be amended in early 2017.

What are the implications?

The relevant groups and entities shall ensure that the required information is produced on time including the necessary procedures for the collection of such information and the development of internal procedures.