The Organisation for Economic Cooperation and Development (OECD) has advanced the development of a standard that defines the Common Reporting Standard (CRS) – Automatic exchange of information among member countries (including Cyprus as a member) to combat fraud and tax evasion

 

What information will be exchanged?

Information will be exchanged on interest, dividends, bank balances, income from certain insurance products, revenue from sale of financial assets and other income or payments

Who are the responsible for providing the information?

Cyprus banks and branches of foreign banks, Cyprus financial intermediaries, Cyprus collective investment funds, insurance companies, trusts – financial forms etc

 

How the Common Reporting Standard – Automatic exchange of information will be performed in Cyprus and in other Member States?

The information will be send to the Cyprus tax authorities and in turn the Cyprus tax authorities will send the information to the tax authorities in the country of tax residence of the relevant individual or entity

 

Who will be affected?

Entities

– Cypriot entities receiving passive dividend income, interest, and royalties etc. from accounts currently in existence (before 01 January 2016). Reporting will be made only if the account value exceeds US $ 250,000 per financial institution (other than non-financial entities and listed companies)

– Cypriot entities receiving passive dividend income, interest, royalties, etc. from new accounts (after 01 January 2016). Reporting will be made irrespective of any amount (other than non-financial entities and listed companies)

Individuals

For existing and new individuals (from 01 January 2016) reporting will be made irrespective of any amount

 

Entities excluded from the Common Reporting Standard – Automatic exchange of information

– Cyprus entities carrying out commercial (active) activities like trading in products, provision of services etc. including entities which hold shares in subsidiaries which carry out commercial activities

– If less than 50% of Cyprus entities gross income is passive income and less than 50% of the assets held are assets that produce or are held for the production of passive income

– Beneficiaries owning or controlling 25% or less in a Cyprus entity

 

How certification of accounts is performed?

For individuals

Self-certification is performed by the account holder and is only valid if it is signed (or otherwise positively confirmed) by the account holder, and contains: name, home address, the state of tax residence, tax identification number and date of birth

For Cyprus private entities

Self-certification is performed by the information available to the public and by a person who has the ability to exercise control over the entity, and is valid only if it is signed (or otherwise positively confirmed) by that person or by proxy of the same and contain: the name, address, state of tax residence, the number of tax residence and date of birth

 

Information given to other OECD countries

For individuals and entities that have the ability to exercise control over an entity, self certification data is disclosed

For Cyprus entities having passive income activities, the state of tax residence and tax identification number is disclosed. For entities having passive income activities, reference is given to natural persons who exercise control over the entity even if they reside in the same country of the entity’s base

 

Timeframe for Common Reporting Standard – Automatic exchange of information

Countries that have committed to exchange information as from 1 January 2017 for data relating to 2016 are:

Anguilla, Argentina, Austria, Barbados, Belgium, Bermuda, Bulgaria, British Virgin Islands, Cayman Islands, Chile, Colombia, Croatia, Curacao, Cyprus, Czech Republic, Denmark, Dominican Republic, Estonia, Faroe Islands, Finland, France, Germany, Gibraltar , Greece, Greenland, Guernsey, Hungary, Iceland, India, Ireland, Isle of Man, Italy, Jersey, Korea, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Mauritius, Montserrat, Netherlands, Niue, Norway, Poland, Portugal, Romania , San Marino, Seychelles, Slovakia, Slovenia, South Africa, Spain, Sweden, Trinidad & Tobago, Turks & Caicos, Uruguay, United Kingdom

Countries that have committed to exchange information as from 1 January 2018 for data relating to 2017 are:

Albania, Andorra, Antigua & Barbuda, Aruba, Australia, Bahamas, Belize, Brazil, Brunei, Darussalam, Canada, Costa Rica, China, Grenada, Hong Kong, Indonesia, Israel, Japan, Macau, Malaysia, Marshall Islands, Monaco, New Zealand, Qatar, Russia, St Kitts & Nevis, Samoa, Saint Lucia, Saint Vincent, Saudi Arabia, Singapore, St. Maarten, Switzerland, Turkey, United Arab Emirates

Note:

US are not included above. US adopted FATCA which operates on a similar basis

 

Other means of exchanging of information between countries:

– Double taxation avoidance treaties between countries followed by a special request of the other country’s tax authorities. (The Common Reporting Standard – automatic exchange of information outbalances treaties)

– Bilateral agreements between countries to exchange information followed by a specific request of the other country’s tax authorities

– EU Directive on Administrative Cooperation in the field of taxation for Member States which is similar to that of the Common Reporting Standard – Automatic exchange of information

 

Contact us

For free personal consultation please contact

Email: info@pkf-nic.com

 

The authors expressly disclaim all and any liability and responsibility to any person, entity or corporation who acts or fails to act as a consequence of any reliance upon the whole or any part of the contents of this publication.

Accordingly no person, entity or corporation should act or rely upon any matter or information as contained or implied within this publication without first obtaining advice from an appropriately qualified professional person or firm of advisors, and ensuring that such advice specifically relates to their particular circumstances.

PKF Cyprus firms are member firms of the PKF International Limited network of legally independent firms and do not accept any responsibility or liability for the actions or inactions on the part of any other individual member firm or firms.