Cyprus

Individual - Significant developments

Last reviewed - 05 February 2020

Cyprus is expanding and updating its double tax treaty (DTT) network. New/amended DTTs with Luxembourg, Mauritius, San Marino, and the United Kingdom entered into force in 2018 and are effective for Cyprus as of 1 January 2019. Also, new DTTs with Andorra and Saudi Arabia and an amending protocol with Ukraine entered into force in 2019 and will be effective for Cyprus as of 1 January 2020. Finally, new/amended DTTs with Kazakhstan and Egypt have been signed and are awaiting entry into force. The DTT with Kazakhstan has been ratified by both parties and will enter into force upon exchange of ratification notes by both parties.

Cyprus is an early adopter of the Common Reporting Standard (CRS) on automatic exchange of financial account information and also has signed an intergovernmental agreement (IGA) with the United States (US) for the Financial Account Tax Compliance Act (FATCA).

Cyprus signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (BEPS) on 7 June 2017. This is now pending ratification which is expected in 2020.

Over the last 3 years Cyprus has also successfully transposed into its legal and tax framework all EU Directives on Administrative Co-operation and Mutual Assistance (i.e. DACs 1-5).

Further, Cyprus is currently in process of implementing the DAC amendment known as DAC6 (implementation expected in 2020), which provides for mandatory automatic exchange of information in relation to reportable cross-border arrangements (RCBAs), pursuant to Directive 2011/16/EU. As a transitional measure, where the first step in an RCBA is implemented between 25 June 2018 and 30 June 2020, the arrangement should be reported between 1 July 2020 and 31 August 2020.