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 form 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?
– Cypriot entities receiving passive dividend income, interest, and royalties etc. from accounts currently in existence (before 01.01.2016). 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 01.01.2016). Reporting will be made irrespective of any amount (other than non-financial entities and listed companies)
For existing and new individuals (from 01.01.2016) 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?
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
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
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