The DAC6 submission deadline is extended to 31 January 2022
On 22 November 2021, the Cyprus Tax Department announced a final extension for filing of information on reportable cross-border arrangements (“DAC6”). The new submission deadline for DAC6, for filing without administrative fines for late submission, has been extended to 31 January 2022, for the following cases:
a) Reportable cross-border arrangements carried out between 25 June 2018 and 30 June 2020, that had to be reported by 28 February 2021;
b) Reportable cross-border arrangements carried out between 1 July 2020 and 31 December 2020, that had to be reported by 31 January 2021;
c) Reportable cross-border arrangements made between 1 January 2021 and 1 January 2022, 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;
d) Reportable cross-border arrangements for which secondary intermediaries provided aid, assistance or advice, between 1 January 2021 and 1 January 2022 and had to submit information within 30 days beginning on the day after they provided aid, assistance or advice;
e) Periodic reports for marketable arrangements.
DAC6 Guidelines issued
The Cypriot Minister of Finance, on 29 October 2021, issued a Decree (Decree N. 438/2021 or the “Decree”) providing guidance on the Cyprus mandatory reporting requirements for cross-border arrangements (the “DAC6 Guidelines”). The DAC6 Guidelines provide guidance to intermediaries and relevant taxpayers, on the interpretation and the implementation of the DAC6 legislation in Cyprus.
You can download the Decree from the Cyprus Tax Department website here. Our dedicated DAC6 team can assist you in analysing these guidelines and provide you with further insights.
Clarifications on the imposition of DAC6 penalties issued
On 10 November 2021, the Cyprus Tax Department issued the interpretative Circular 55 (“Circular”) providing clarifications in relation to the imposition of DAC6 penalties.
The Circular amongst others provides for the following:
• A yearly penalty cap of EUR 120,000 will apply to reportable cross-border arrangements that have a reporting deadline within a calendar year. This yearly cap does not apply if the penalty arose due to a deliberate breach or fraud by the intermediary / relevant taxpayer.
• A 50% reduction in penalty imposed on a reportable cross-border arrangement will apply in cases where ‘corrective actions’ have been taken by the intermediary / relevant taxpayer before the income tax return deadline of the year in which reporting arose. The 50% reduction does not reduce the yearly penalty cap of EUR 120,000.
• Every intermediary or relevant taxpayer must keep books and any other records that may relate to a reportable cross-border arrangement for a period of at least six (6) years from the end of the tax year to which the cross-border arrangement refers.
You can download the Circular from the Cyprus Tax Department website here. Our dedicated DAC6 team can assist you to understand and comply with the onerous requirements of DAC6.
How can KPMG assist?
Should you like to assist you on the above, please contact one of our trusted advisors from the Tax Department at KPMG in Cyprus.
How can KPMG assist?
Should you like to further discuss the content and potential impact of the Interpretative Circulars to your business, please contact one of our trusted advisors from the Tax Department at KPMG in Cyprus.