Cyprus: Clarification on bilateral Competent Authority Arrangement for exchange of CbC reports with United States

Bilateral Competent Authority Arrangement for exchange of CbC reports with United States

Bilateral Competent Authority Arrangement for exchange of CbC reports with United States

The Cyprus tax authority (on 13 October 2022) announced the bilateral Competent Authority Arrangement (CAA) for the exchange of country-by-country (CbC) reports between Cyprus and the United States—which is currently under negotiation—is expected to be effective for reporting fiscal years starting on or after 1 January 2022.

Consequently, when the ultimate parent entity of a multinational group of enterprises (MNE) is tax resident in the United States, the secondary filing mechanism needs to be triggered for reporting fiscal years starting on or after 1 January 2021 and before 1 January 2022.

For example, 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 2021, even if a CbC report has or will be submitted in the United States.

Additionally, notifications for reporting fiscal years starting on or after 1 January 2021 and before 1 January 2022 that have been filed in Cyprus by Cypriot constituent entities of MNE groups affected by this announcement must be revised (if required). If such notifications are revised by 31 December 2022, no penalties will be imposed for the reporting fiscal year starting on or after 1 January 2021 and before 1 January 2022.

Read an October 2022 report prepared by the KPMG member firm in Cyprus 

 

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