On 13.10.2022 the Cyprus Tax Department notified all legal entities and their official representatives that the Bilateral Competent Authority Arrangement (CAA) for the exchange of Country-by-Country (CbC Reports) between Cyprus and the United States of America for Reporting Fiscal Years will be effective on or after 01.01.2022.
As a result, if the Ultimate Parent Entity of a Multinational Group of Enterprises (MNE) is considered as a tax resident in the USA, the secondary filing mechanism should be applied for Reporting Fiscal Years starting on or after 01.01.2021 and before 01.01.2022.
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, regardless of whether a CbC Report has or will be conducted in the USA.
Moreover, in the instances where notifications for reporting fiscal years starting on or after 01.01.2021 and before 01.01.2022 have been filed in Cyprus by Cypriot Constituent Entities of MNE Groups which are impacted by this announcement, such notifications must be reviewed in accordance with this announcement.
If such notifications are reviewed by 31.12.2022, no penalties will be imposed for the Reporting Fiscal Year starting on or after 01.01.2021 and before 01.01.2022.
