Cyprus: Status of bilateral Competent Authority Arrangement for exchange of CbC reports with United States
The bilateral CAA for the exchange of CbC reports is expected to be effective for reporting fiscal years starting on or after 1 January 2023.
Status of bilateral Competent Authority Arrangement for exchange of CbC reports
The Cyprus tax authority announced that the bilateral Competent Authority Arrangement (CAA) for the exchange of country-by-country (CbC) reports between Cyprus and the United States—which is currently under negotiation—is expected to be effective for reporting fiscal years starting on or after 1 January 2023.
Consequently, when the ultimate parent entity of a multinational group of enterprises (MNE) is tax resident in the United States, the secondary filing mechanism needs to be triggered for reporting fiscal years starting on or after 1 January 2022 and before 1 January 2023.
For example, a local filing obligation should still arise in Cyprus in respect of an MNE group’s CbC report for reporting fiscal year ending on 31 December 2022, even if a CbC report has or will be submitted in the United States.
Additionally, notifications for reporting fiscal years starting on or after 1 January 2022 and before 1 January 2023 that have been filed in Cyprus by Cypriot constituent entities of MNE groups affected by this announcement must be revised (if required). If such notifications are revised by 31 December 2023, no penalties will be imposed for the reporting fiscal year starting on or after 1 January 2022 and before 1 January 2023.
Read an October 2023 report prepared by the KPMG member firm in Cyprus
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.