The Multilateral Competent Authority Agreement for the Automatic Exchange of Financial Information in Tax Matters, which was concluded on 29 October 2014 by the contracting parties of the Global Forum of the Organization for Economic Co-operation and Development (OECD), states the commitment of the contracting parties to the new international standard for the automatic exchange of financial information in tax matters.
The Common Reporting Standard (CRS), formally referred to as the Standard for Automatic Exchange of Financial Account Information is implemented at EU level via the Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation, as amended.
Based on the above, and in order to transpose the Standard’s requirements into the domestic legislation of Cyprus, a Decree was published on 31st December 2015, in accordance with the provisions of Article 6(16) of the Assessment and Collection of Taxes Law of 1978 to 2015. The Decree entered into force on 1st January 2016. A revised decree was published on 20th of May 2016 to incorporate some changes.
Based on the revised Decree, a Passive NFE will now be required to disclose the information of its Ultimate Beneficial Owners only where the effective percentage shareholding exceeds the 25% threshold. Prior to this change, disclosure was required where the effective percentage shareholding exceeded the 10% threshold.