The Cyprus Parliament on March 18 approved the draft Bill amending the Law on Administrative Cooperation in the Field of Taxation, implementing DAC6.
In addition, the Cypriot Ministry of Finance (MoF) submitted two bills to Parliament to amend tax legislation to strengthen Cyprus’ tax framework for preventing tax abuse, tax evasion, and tax avoidance (the ‘bills’).
The new tax treaty between Cyprus and Egypt, which was signed on October 8, 2019, and which entered into force on July 31, 2020, is effective as of January 1, 2021, based on a recent Interpretative Directive issued by the Cyprus Tax Authority (CTA). The new tax treaty replaced the existing treaty between Cyprus and Egypt (signed in 1993).
On March 5, Cyprus ratified the amending Protocol to the tax treaty between Cyprus and Germany that was signed on February 19, 2021.
Although no penalties should arise for DAC6 filings submitted by June 30, 2021, taxpayers and intermediaries should consider their historic (from June 25, 2018 onwards) arrangements immediately as well as any future cross border arrangements. Taxpayers should monitor for further developments on this matter to evaluate how this may affect their existing and new structures as well as their business.