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Recently, we discussed the current state of play regarding DAC6 in Romania. In this update, we will inform you about where DAC6 currently stands in Cyprus, as a lot remains unclear in this country as well.

On February 5, 2021, the Tax Department of Cyprus has officially announced to extend the deadline for DAC6 submissions until March 31, 2021, for the following cases:

  • Historic period: reportable cross-border arrangements that have been made between June 25, 2018, and June 30, 2020, and had to be submitted by February 28, 2021;  
  • Deferral period: reportable cross-border arrangements that had been made between July 1, 2020, and December 31, 2020, and had to be submitted by January 31, 2021;  
  • Regular period, reportable cross-border arrangements:
    • made between January 1, 2021, and February 28, 2021, that had to be submitted within 30 days from the date they were made available for implementation or were ready for implementation or the first step in the implementation has been made, whichever occurred first; or
    • for which secondary intermediaries provided aid, assistance or advice, between January 1, 2021, and February 28, 2021, and had to submit information within 30 days beginning on the day after they provided aid, assistance, or advice.  

Key takeaways

The Cypriot mandatory disclosure regime is expected to be generally consistent with EU DAC6:  

  • Tax authority: Tax Department of Cyprus   
  • Reporting deadlines: March 31, 2021  
  • Penalties: up to approx. EUR 20,000 (incomplete, incorrect, late, or non-filing)  
  • Reporting format: in XML Schema file.   
  • Reporting language: one of the Official languages of the EU  
  • Country specifics: it is our understanding that there are no deviations from EU, most notably:
    • Taxes covered: Income Tax, Capital Gains Tax, Special Defense Contribution
    • Taxes excluded: VAT, Custom & Excise Duties, Social Security Contributions
    • Domestic transactions: No
    • Additional hallmarks: No   

Cypriot intermediaries & Legal right for professional privilege   

Intermediaries only have a reporting obligation in Cyprus based on local residency, permanent establishment, incorporation, or professional registration. Cyprus-based intermediaries are obliged to report information that is within their knowledge (or which they are reasonably expected to know), possession, or control on reportable information.  

When an intermediary is obliged to maintain professional secrecy, it is required to notify any and all other intermediaries that the reporting obligation automatically rests with. If there are no other intermediaries, it should notify the relevant taxpayer of his reporting duty.    

How to file in Cyprus

Please be informed that you can report your local DAC6 reports with DAC6pro already, as we have already implemented the local XML reporting schemas some time ago!  

Please find general information issued by the Cypriot Tax Department here. For last week‘s announcement on the filing extension, you can find the official statement here.   

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