Cyprus issues revised Country by Country Reporting Decree

 Cyprus issues revised Country by Country Reporting Decree:The Ministry of Finance of the Republic of Cyprus has recently issued a revised Decree on Country by Country Reporting which replaces the initial Decree which was issued on 30 December 2016.  Below are the main changes from the previous Decree as follows: The requirement of filing locally a CbC report by a Cyprus tax resident constituent entity of a Multinational Enterprise (MNE) Group, not being the Ultimate Parent Entity or the Surrogate Parent Entity shall apply for fiscal year from 1 January 2017 onwards. Moreover, the concept of Equivalent Country by Country Report has been introduced.  This concept requires a Cyprus tax resident Constituent Entity of an MNE Group to file a CbC Report but merely a partial one under the secondary mechanism.  This shall apply in cases where the Ultimate parent Entity has refused to provide all required information to the Cyprus tax resident Constituent Entity.  Furthermore, a new requirement has been introduced for maintaining books and records supporting the information disclosed in the Country by Country Report.

Cyprus issues revised Country by Country Reporting Decree:Effect on MNE Groups and essential steps:

After the issuance of the revised decree MNE Groups should be assessing whether they fall within the scope of the Country by Country Reporting based on the eur750 million consolidated group revenue threshold.  Moreover they need to ensure that they have in place the necessary systems for the collection of the information required to be included in the Country by Country Report. In addition they need to determine which group entity will be the Reporting Entity and also be certain on the Reporting deadlines and relevant legislations for penalties and sanctions at an international level.  MNE Groups should also be alert and consider whether such information is likely to have an impact and its level as well as be ready to take remedial measures.