Cyprus

Business combinations

Transfers of assets and liabilities between companies can occur without tax implications within the framework of a tax-exempt qualified reorganisation. Reorganisations include mergers, demergers, partial divisions, transfers of divisions of activities, exchanges of shares, and transfers of registered office of a European company (SE) or a European cooperative company (SCE).

Intergovernmental agreements (IGAs) and cooperation

Alongside DTTs, Cyprus is a signatory to the OECD/Council of Europe Convention on Mutual Administrative Assistance in Tax Matters and is an early adopter of the CRS on automatic exchange of information. Cyprus has also signed a Model 1 IGA with the United States (US) for the US Financial Account Tax Compliance Act (FATCA) initiative on automatic exchange of information.

Cyprus is a member of the ad-hoc group for the multilateral instrument implementing BEPS tax treaty measures. In November 2016, the group adopted the BEPS Action 15 ‘Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion', which was signed on 7 June 2017.

On 1 November 2016, Cyprus signed the Multilateral Competent Authority Agreement, which implements the G20/OECD BEPS Action 13 CbC reporting requirements (see the Group taxation section for more information).

Cyprus, as a member state of the European Union, incorporates all EU Directives in its domestic Laws.

Cyprus is in cooperation with the European Commission (EC) regarding the EC’s recent focus into fiscal state aid and tax rulings. To date, the European Commission has not raised any specific investigations regarding Cyprus.