The Cyprus Tax Department announced that the European Council Directive 2018/822 known as DAC6, is expected to be incorporated into the Cyprus legislation within the current month.

The aim of this new legislation is to tackle tax avoidance and prevent harmful tax practices by closing loopholes in the tax legislations of the member states. DAC 6 affects the EU based intermediaries or where there is no EU based intermediary the tax payers themselves and obligates them to report all cross-border arrangements involving at least one EU country that fall  into 5 broadly defined categories, called ‘ Hallmarks’ which contain one or more elements that could be considered as harmful and aggressive tax structuring. The legislation includes significant risk of sanctions both for legal entities and physical persons in case of non-compliance. 

Arrangements which are reportable cover transactions, payments, schemes and structures, verbal agreements, agreements as from 25 June 2018

As some of the deadlines for the submission of information introduced by the Directive have expired, the deadline for the submission of DAC6 information is extended until 31 March 2021, in the following cases:

  • Reportable cross-border arrangements that have been made between 25 June 2018 and 30 June 2020 and had to be submitted by 28 February 2021.
  • Reportable cross-border arrangements that had been made between 1 July 2020 and 31 December 2020 and had to be submitted by 31 January 2021.
  • Reportable cross-border arrangements made between 1 January 2021 and 28 February 2021, that had to be submitted within 30 days from the date they were made available for implementation or were ready for implementation or the first step in the implementation has been made, whichever occured first.
  • Reportable cross-border arrangements for which secondary intermediaries provided aid, assistance or advice, between 1 January 2021and 28 February 2021 and had to submit information within 30 days beginning on the day after they provided aid, assistance or advice.

Find below announcement sent on July 2020 regarding DAC6

We advise you to contact Globalserve to discuss if you are affected by this legislation at Адрес электронной почты защищен от спам-ботов. Для просмотра адреса в вашем браузере должен быть включен Javascript. and consider the course of action that has to be taken.


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