The bilateral Competent Authority Arrangement (CAA) for the exchange of Country-by-Country (CbC) Reports among both The United States as well as Cyprus, which is presently under negotiation, is anticipated to take effect for Reporting Fiscal Years beginning on or after January 1, 2022, according to a notice issued by the Cyprus Tax Department on October 13, 2022, across all legal entities and their representatives. Therefore, the secondary filing mechanism must be activated for Reporting Fiscal Years beginning on or after January 1, 2021, but before January 1, 2022, in the event that the Ultimate Parent Entity of a Multinational Group of Enterprises (MNE) is a tax resident in the United States of America

For instance, even though a CbC Report has been or is to be submitted in the United States of America, a local filing obligation still should exist in Cyprus with regard to an MNE Group's CbC report for the Reporting Fiscal Year ending on December 31, 2021.

Furthermore, Cypriot Constituent Entities of MNE Groups that are impacted by this announcement should revise their notifications (as necessary) in conformance with this official statement in situations where they have filed notifications in Cyprus for reporting fiscal years beginning on or after January 1, 2021, and prior to January 1, 2022. No fines will be charged for the Reporting Fiscal Year beginning on or after January 1, 2021, and before January 1, 2022, provided that such notifications are corrected by December 31, 2022.

To find the relevant announcement, click here