The Ministry of Finance in late December 2016 issued a decree to align provisions of Cypriot tax law with the requirements of EU Council Directive (EU) 2016/881 adopting the recommendations of the OECD base erosion and profit shifting (BEPS) Action Plan 13 on country-by-country (CbC) reporting.
Based on the provisions of the decree, effective from 1 January 2016, a tax resident company of Cyprus that is the ultimate parent company of a multinational enterprise (MNE) group must submit a CbC report in its country of residency if the annual consolidated revenue of the MNE group is equal or exceeds a threshold of €750 million.
A Cyprus tax resident company that may not be the ultimate parent company of the MNE group may be considered to be the “surrogate parent company” for CbC reporting purposes if any of the following conditions is satisfied:
A surrogate parent company has the responsibility to submit the CbC report of the MNE group in place of its ultimate parent company.
Any constituent company of an MNE group that is a tax resident of Cyprus, must notify the tax authorities of Cyprus as to whether it is the ultimate parent company (or the surrogate parent company) no later than the last day of the reporting fiscal year of the MNE group.
The date for the first notification has been extended, and the deadline for notification is 20 October 2017.
The Cyprus ultimate parent or surrogate parent company of an MNE group then will have to proceed with an electronic submission of the relevant CbC report, filed with the Cyprus tax authorities within a period of 15 months as from the end of the reporting fiscal year.
As regards to the submission of the first CbC report relating to fiscal years beginning between the period 1 January to 31 December 2016, the due date for submission has been extended by three months.
The CbC report must include the following:
Read a January 2017 report prepared by the KPMG member firm in Cyprus
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