Bilateral Agreement between Cyprus and the United States

Bilateral Agreement between Cyprus and the United  States

The bilateral Competent Authority Arrangement (CAA) for the exchange of Country-by-Country (CbC Reports) between Cyprus and the United States of America which is at present under negotiation, is anticipated to be in effect for Reporting Fiscal Years starting on or after 1 January 2021 according to the Cyprus Tax Department.

Therefore, in case where the Ultimate Parent Entity of a Multinational Group of Enterprises (MNE) is tax resident in the United States of America, the secondary filing mechanism should be prompted for Reporting Fiscal Years starting on or after 1 January 2020 and before 1 January 2021.

For instance, a local filing requirement should still arise in Cyprus in respect of an MNE Group’s CbC report for Reporting Fiscal Year ending on 31 December 2020, even if a CbC Report has or will be submitted in the United States of America.

Additionally, in the cases where notifications for reporting fiscal years starting on or after 1 January 2020 and before 1 January 2021 have been filed in Cyprus by Cypriot Constituent Entities of MNE Groups which are affected by this announcement, such notifications must be revised if required in accordance with the tax departments announcement. If such notifications are revised by 31 December 2021, no penalties will be imposed for the Reporting Fiscal Year starting on or after 1 January 2020 and before 1 January 2021.

For more information click here.

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