Clarification Bilateral Agreement between the Republic of Cyprus and the United States
On September 4th, 2020, the Cyprus Tax Department has published a clarification in relation to the bilateral agreement between the Republic of Cyprus and the United States.
The bilateral Competent Authority Arrangement (CAA) for the exchange of Country-by-Country Reporting (CbC Reports) between Cyprus and the United States of America is expected to be effective for Reporting Fiscal Years starting on or after 1st January 2020.
The clarification provides that; “in the case where the Ultimate Parent Entity of a Multinational Group of Enterprises (MNE) is tax resident in the United States of America, the secondary filing mechanism should be triggered for Reporting Fiscal Years starting on or after 1 January 2019 and before 1 January 2020.”
As such; even if a CbC Report has or will be submitted in the United States of America, a local filing obligation should still arise in Cyprus in respect of an MNE Group’s CbC report for Reporting Fiscal Year ending on 31 December 2019.
Furthermore, the Cypriot Constituent Entities of MNE Groups, which has already filed their notifications for reporting fiscal years starting on or after 1st January 2019 and before 1 January 2020 in Cyprus must revise these notifications (if required) in accordance with this announcement. No penalties will be imposed for the Reporting Fiscal Year starting on or after 1 January 2019 and before the 1st of January 2020, if such notifications are revised by the 31st December 2020.
For further information and clarifications please contact us via email at info@zambartaslegal.com or via telephone +357 22262108