EU: EC publishes new Pillar Two FAQ on Cyprus; state of play on implementation of DAC9
FAQ on qualified status of IIR in Cyprus and exchange of GIR information between Cyprus and other EU countries
The European Commission (EC) on May 29, 2026, published a new FAQ addressing the qualified status of the income inclusion rule (IIR) in Cyprus, as well as the exchange of global anti-base erosion (GloBE) information return (GIR) information between Cyprus and other EU countries.
According to the FAQ, Cyprus is not listed in the OECD central record that identifies jurisdictions that have been granted transitional qualified status concerning the local implementation of the domestic minimum top-up tax (DMTT) and IIR. Cyprus is also not listed in the annex of countries that have joined the common understanding on central GIR filing.
Key takeaways from the FAQ include:
- IIR qualified status: For purposes of and in accordance with the Pillar Two directive, the qualified status of the Cypriot IIR is directly derived from Article 3(18) of the directive, for fiscal years commencing on or after December 31, 2023. Therefore, all member states should treat Cyprus as having a qualified IIR in effect.
- Exchange of GIR information: Cyprus can receive GIR as of May 31 2026, and is committed and obliged under EU law to exchange information under DAC9 with other member states in time for the first exchange deadline (December 31, 2026). For that reason, other EU member states should not require local filing when a multinational enterprise (MNE) opts to file its GIR centrally in Cyprus.
Cyprus has also signed the GIR Multilateral Competent Authority Agreement (GIR MCAA) but no exchange relationships with non-EU countries have so far been activated according to the OECD overview.
Read a June 2026 report prepared by KPMG’s EU Tax Centre
In addition, the EU Tax Centre’s report includes an update on the state of play on implementation in the EU of Council Directive (EU) 2025/872 on administrative cooperation to establish a framework for the exchange of Pillar Two information between member states (DAC9), which member states were required to transpose by December 31, 2025.