On 19 September 2018 the Tax Department announced the following regarding CbCR/DAC4 obligation.

The Cyprus Tax Department informs all legal entities and their representatives that, constituent Entities of Cyprus UPEs will not be subject to local filing in their jurisdiction of tax residence, provided the CbC MCAA is activated between Cyprus and the other jurisdiction.

CbC Activated Exchange Relationships are available on OECD website on the following link:

http://www.oecd.org/tax/automatic-exchange/international-framework-for-the-crs/exchange-relationships/

Also, regarding constituent Entities in Cyprus with no Cyprus tax resident UPEs, local filing will not be applicable.

In case the exchange relationship is not activated for the respective fiscal year (e.g. 31 December 2017) by the CbCR reporting deadline (e.g. 31 December 2018), local filing obligation should arise for Cypriot constituent entities.

No exchange information agreement is expected to be signed with the US prior to 31 December 2018, thus local filing obligation should arise in Cyprus for cases where the Group's CbCR will be submitted in the US.

In the cases where notifications have been filed in Cyprus by CY Constituent Entities of MNE Groups affected by this announcement, such notifications must be revised in accordance with this announcement. If such notifications are revised by end of December 2018 no penalties will be imposed for 2017.

All content prepared by KPMG Cyprus.