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The Exchange of Tax Information Portal is an initiative of the Global Forum on Transparency and Exchange of Information for Tax Purposes. The Global Forum conducts peer reviews of its member jurisdictions' ability to co-operate with other tax administrations in accordance with the internationally agreed standard. The standard provides for exchange of information on request where it is foreseeably relevant to the administration and enforcement of the domestic tax laws of the requesting jurisdiction. Effective exchange of information requires that jurisdictions ensure information is available, that it can be obtained by the tax authorities and that there are mechanisms in place allowing for the exchange of that information. The Global Forum's peer review process examines both the legal and regulatory aspects of exchange (Phase 1 reviews) and the exchange of information in practice (Phase 2). The EOI Portal will track the development of these peer reviews, including changes that jurisdictions make in response to the Global Forum's recommendations.

Peer Review: Peer Review Report Phase 1 Legal and Regulatory Framework - Cyprus

This report for Cyprus has been published on 5 Apr 2012. You can buy this report, or browse it online below.

Skip directly to the Executive Summary. You may also want to view the tables of determinations and ratings.


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Determinations and Recommendations

Jurisdictions should ensure that ownership and identity information for all relevant entities and arrangements is available to their competent authorities. (ToR A.1)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   Although bearer shares cannot be issued, the issuance of share warrants to bearer is allowed by public companies. Although Cypriot authorities report that no share warrants to bearer are currently in existence, no legal requirements exist to identify owners of share warrants to bearer.  Cyprus should ensure the availability of ownership information in respect of bearers of share warrants in all cases. 
Although in all cases the beneficiaries of at least ten percent of the trust property must be identified by the trustee, obligations in Cyprus to identify settlors, other trustees and beneficiaries of trusts are not consistently provided for.  Cyprus should ensure the availability of ownership and identity information in respect of trusts in all cases. 
Jurisdictions should ensure that reliable accounting records are kept for all relevant entities and arrangements. (ToR A.2)
Determination Factors Recommendations
The element is not in place.   Although there is an obligation to keep documentation, it is not clear in the case of trusts deriving only dividend and interest what books and records are to be kept.  Cyprus should introduce further guidance for trusts deriving only dividend and interest income on which accounting records are required to be kept. 
Although there is a requirement for most taxpayers to keep invoices and receipts they issued in respect of their transactions and collections , further guidance is required for all relevant entities and arrangements what underlying documentation should be kept.  Cyprus should introduce further guidance for all relevant entities and arrangements to maintain underlying documentation. 
There is no obligation to keep underlying documentation and to keep records for a period of at least five years in respect of companies incorporated in Cyprus but managed and controlled in another jurisdiction.  Cyprus should ensure that all relevant entities and arrangements keep underlying documentation and that they keep records (including underlying documentation) for a period of at least five years. 
Banking information should be available for all account-holders. (ToR A.3)
Determination Factors Recommendations
The element is in place.      
Competent authorities should have the power to obtain and provide information that is the subject of a request under an exchange of information arrangement from any person within their territorial jurisdiction who is in possession or control of such information (irrespective of any legal obligation on such person to maintain the secrecy of the information). (ToR B.1)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   Cyprus’ access powers to obtain information under an information exchange agreement are only applicable to requests made under double tax conventions.  Cyprus should ensure that its competent authority has the power to obtain all relevant information pursuant to requests under all exchange of information agreements (regardless of their form). 
The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the requested jurisdiction should be compatible with effective exchange of information. (ToR B.2)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   No exceptions exist to informing the person who is asked to produce information which foreign tax authority has requested the information.  Cyprus should ensure that appropriate exceptions exist to informing the person who is asked to produce information which foreign tax authority had requested the information (e.g. in cases in which informing that person is likely to undermine the chance of the success of the investigation conducted by the requesting jurisdiction). 
Exchange of information mechanisms should provide for effective exchange of information. (ToR C.1)
Determination Factors Recommendations
The element is in place.      
The jurisdictions' network of information exchange mechanisms should cover all relevant partners. (ToR C.2)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   Cyprus has been approached by at least two jurisdictions to negotiate a TIEA and has so far not entered into negotiations with them. Furthermore, Cyprus’ domestic law does not allow for obtaining and exchanging information in the case of information exchange agreements other than DTCs.  Cyprus should enter into agreements for exchange of information (regardless of their form) with all relevant partners, meaning those partners who are interested in entering into an information exchange arrangement with it. 
The jurisdictions' mechanisms for exchange of information should have adequate provisions to ensure the confidentiality of information received. (ToR C.3)
Determination Factors Recommendations
The element is in place.      
The exchange of information mechanisms should respect the rights and safeguards of taxpayers and third parties. (ToR C.4)
Determination Factors Recommendations
The element is in place.      
The jurisdiction should provide information under its network of agreements in a timely manner. (ToR C.5)
Determination Factors Recommendations
The assessment team is not in a position to evaluate whether this element is in place, as it involves issues of practice that are dealt with in the Phase 2 review.