Administrative Cooperation in the Field of Taxation Law Amendment 2015

The Administrative Cooperation in the Field of Taxation Law, 205 of 2012, was amended for purposes of better regulation in line with EU Directive 2011/16.

In particular, Section 8(3) of the Law, as amended, explicitly provides that the competent authority in Cyprus shall forward “the tax information referred to in Section 8(1)” to the competent authority of any other EU member state concerned as quickly as possible, and no later than one month after the information becomes available. Prior to the amendment, Section 8(3) of the Law only referred to “the available information” instead of making explicit reference to Section 8(1).

It is reminded that Section 8 of the Law regulates the spontaneous exchange of information between Cyprus and the competent authorities of other EU member states. It particularly covers the exchange of tax information in cases where:

• the competent authority in Cyprus has grounds for supposing that there may be a loss of tax in any other EU member state;
• a person liable to tax obtains a reduction in, or an exemption from, tax in Cyprus which would give rise to an increase in tax or to liability to tax in any other EU member state;
• business dealings between a person liable to tax in Cyprus and a person liable to tax in any other EU member state are conducted through one or more countries in such a way that a saving in tax may result in Cyprus or in the other EU member state or in both;
• the competent authority in Cyprus has grounds for supposing that a saving of tax may result from artificial transfers of profits within groups of enterprises;
• information forwarded to Cyprus by the competent authority of any other EU member state has enabled information to be obtained, which may be relevant in assessing liability to tax in the other EU member state.