Reporting framework
Notification requirements
Country-by-country reporting requirements
Secondary reporting requirements
Exchange of information
Accounting records

On May 26 2017 the minister of finance issued a revised ministerial order (a form of secondary legislation) on country-by-country reporting under the Assessment and Collection of Taxes Law. The order replaces a previous order issued on December 30 2016.

Reporting framework

Under the EU country-by-country reporting arrangements,(1) large multinational groups with an annual turnover of more than €750 million must file annual reports for each tax jurisdiction in which they operate, detailing their:

  • revenue from third parties;
  • revenue from related parties;
  • profit or loss before income tax;
  • income tax paid;
  • income tax accrued;
  • share capital;
  • accumulated earnings;
  • number of employees; and
  • tangible assets other than cash or cash equivalents.

The report should also identify:

  • each of the group's constituent entities;
  • the jurisdiction in which it is tax resident;
  • the jurisdiction in which it is incorporated; and
  • its business activities.

This information must be reported to the tax authorities of the EU member state where the group's ultimate parent entity (UPE) is tax resident for fiscal years starting on or after January 1 2016. If the UPE is not resident in the European Union, the report must be filed through a surrogate parent entity (SPE) or its EU-based subsidiaries. If no adequate arrangement is in place for the UPE or SPE to submit the country-by-country report, constituent entities must submit reports through the so-called 'secondary mechanism'.

Notification requirements

The order requires Cyprus-resident members of large multinational groups to notify the tax department by the end of each fiscal year, as follows:

  • UPEs must confirm that they are the group's country-by-country reporting entity.
  • SPEs must confirm that they are the group's country-by-country reporting entity and notify the tax department of the UPE's identity and tax residence.
  • Constituent entities which are neither the UPE nor the SPE must notify the tax department of the identity and tax residence of the group's:
    • country-by-country reporting entity; and
    • UPE, if it is different from the reporting entity.

For the 2016 tax year the deadline for notification has been extended to October 20 2017.

Country-by-country reporting requirements

The order requires all Cyprus-resident companies which are the UPE or SPE of a large multinational group to submit the group country-by-country report for the year ending December 31 2016 to the tax department no later than December 31 2017.

Secondary reporting requirements

Article 5(a)(iii) of the order requires Cyprus-resident constituent entities of large multinational groups to file a country-by-country report if there is no adequate mechanism in place for the report to be submitted otherwise – for example, if:

  • the UPE is not required to file a country-by-country report in its country of residence;
  • there is no exchange of information arrangement in place between that jurisdiction and Cyprus; or
  • the jurisdiction has been notified regarding a systematic failure to exchange information and there is no SPE.

In such cases, the Cyprus tax resident constituent entity will request all necessary information from the UPE to enable it to complete and file the report. If the information is not made available, the Cyprus tax resident entity is required to file an equivalent country-by-country report notifying the tax department of this. These secondary reporting requirements apply only to financial years starting on or after January 1 2017.

Exchange of information

The tax authorities will automatically exchange country-by-country reports filed by UPEs or SPEs with other jurisdictions in which the group has a presence within 15 months from the last day of the fiscal year to which they relate. An additional three months is allowed for 2016, the first reporting year.

Accounting records

The ministerial order also provides that companies should maintain and retain for at least six years adequate accounting records to substantiate reports.

For further information on this topic please contact Marissa Christodoulidou at Andreas Neocleous & Co LLC by telephone (+357 25 110 000) or email ([email protected]). The Andreas Neocleous & Co LLC website can be accessed at


(1) Set out in EU Directive 2016/881/EU, amending EU Directive 2011/16/EU as regards the mandatory automatic exchange of information.