On 14 July 2022, the House of Representatives voted amendments to Articles 8(21) and 8(23) of the Income Tax Law (ITL) related to the income tax exemptions granted to employees who take up first employment in Cyprus. The amended provisions of the Law have been published in the Government Gazette on 26 July 2022. These amendments form part of a wider strategy of the Cyprus Government for attracting both international investments and diversified talent. Moreover, such amendments complement the recent changes in the migration rules which simplify and expedite the relocation of staff and their families from EU and non-EU countries. The new 50% exemption (Article 8(23A)) The provisions of the new Article 8(23A) of the ITL apply as from 1 January 2022 for individuals who take up first employment in Cyprus commencing on or after 1 January 2022 provided that the following conditions are satisfied:   • The individuals were not tax resident of Cyprus for a period of at least 10 consecutive years prior to the commencement of their employment in Cyprus; and • Their annual remuneration from exercising their employment in Cyprus exceeds the threshold of €55.000.   The exemption is granted in any tax year where the €55.000 threshold is satisfied. The exemption can also be granted (subject to special rules) in the first and final tax year as well as in cases where the annual remuneration fluctuates below the annual threshold of €55.000.   The exemption is available once in a lifetime for a maximum period of 17 years starting from the tax year of taking up first employment in Cyprus.   It should be noted that this exemption does not require the individuals to become Cyprus tax residents.   Moreover, individuals claiming this exemption cannot also claim the existing 50% exemption (Article 8(23)), the existing 20% exemption (Article 8(21)) or the new 20% exemption (Article 8(21A)).   Transitional provisions   Moreover, individuals who took up employment in Cyprus prior to January 2022, may also be eligible to transition themselves and claim an exemption as per the new Article 8(23A) as shown below:   Year of commencement of 1st employment Eligible persons   Prior to 2022 Individuals who benefited from the existing 50% exemption (Article 8(23)) and continuously exercised their employment in Cyprus up to and including 2021     Between 2016 and 2021 Individuals whose annual remuneration from first employment in Cyprus exceeded €55.000 Individuals whose annual remuneration from first employment in Cyprus did not exceed €55.000 and within 6 months, starting from 26th July 2022, their remuneration will exceed the €55.000 threshold   Individuals currently benefiting under the existing 50% exemption (Article 8(23)) and do not fall within any of the cases mentioned above will continue to benefit from the existing 50% exemption up until the completion of the 10 year period. It should be noted that the provisions of Article 8(23) apply for individuals taking up first employment in Cyprus up until 26th July 2022.   The new 20% exemption (Article 8(21A)) Under the provisions of Article8 (21A), which are applicable as from 26th July 2022, individuals who take up first employment in Cyprus after 26th July 2022 are eligible to claim a 20% exemption on their annual remuneration (capped at €8.550) for a maximum period of 7 years.   Individuals claiming the new 20% exemption should have been non-Cyprus tax residents for at least 3 consecutive years prior to the commencement of first employment in Cyprus and must have been employed outside of Cyprus by a non- resident employer.   The exemption can be claimed in the tax year following the tax year of commencement of first employment in Cyprus (i.e. if first employment commences in 2022, the 20% exemption is granted from tax year 2023 up until tax year 2029).   Individuals already benefiting from the 50% exemption will not be eligible to additionally claim the 20% exemption.   Individuals who are currently eligible under the existing 20% exemption (Article 8(21)), and who are not eligible for the transitional provisions (mentioned above) will continue to benefit from the existing 20% exemption up until the completion of the 10 year period.

Cyprus implements Beneficial Ownership Register for trusts and similar legal arrangements Further to the introduction of the register of Beneficial Owners (BOs) for companies, on the 18 June 2021 Cyprus has introduced a similar register for BOs of Trusts and other similar legal arrangements (the “Trust Register”) to be kept electronically by the Cyprus Securities and Exchanges Commission (CySEC) which is the supervisory authority for the implementation and operation of the Trust Register. The Trust Register was implemented through CySEC’s Directive for the prevention and suppression of money laundering and terrorist financing (register of beneficial owners of express trusts and similar legal arrangements) (the “Directive”) which provides information and guidance in relation to the registration of express trusts and similar legal arrangements in the Trust Register. The Directive applies for express trusts which are defined as trusts created expressly by a settlor at his own will. Trusts arising by operation of law as well as trusts for which the settlor shows no clear intention for their creation are not considered to be express trusts. Registration of an express trust should take place in cases where: the trustee is located or residing in the Republic of Cyprus; or the trustee, which is located or residing outside EU, establishes a business relationship or acquires immovable property in Cyprus on behalf of the express trust. Information to be submitted The following information must be submitted for registration: For the trusts and other similar legal arrangements Name of the trust Country and date of establishment Applicable law Termination date (if applicable) Country in which the trustee is established or resides and details of his address In case the trustee resides outside the EU and establishes a business relationship on behalf of the trust in Cyprus, the date of commencement of the business relationship, the name of the person with whom such relationship is established together with the document which governs such a relationship In case the trustee resides outside the EU and acquires immovable property on behalf of the “Stated” (expressed) trust in Cyprus, the registration number and address of the immovable property together with the title deed of the property Any other information and/or supporting documentation requested by CySEC for identification purposes BO/s (trustee, settlor, protector, beneficiaries) Name, surname and father’s name Date and place of birth Nationality/ies Residential Address Type, number and country of issuance of identification document Date of death (where applicable) Date on which the person became beneficial owner The nature and extent of the rights which are directly or indirectly held by the UBO The role of the UBO in the trust or in a similar legal arrangement Any other information and/or supporting documentation requested by CySEC for identification purposes In case the Trust has one or more classes of beneficiaries, the following information should also be provided: Description of the class of beneficiaries and its members the nature and extent of the rights of each class of beneficiaries Deadlines and Charges A six-month period has been granted for existing trusts to be registered. For new trusts falling under either of the two cases, as well as for any changes in the information submitted to the Trust Register for trusts already registered, there is a time limit of 15 days from the date of appointment of the trustee or the date on which such changes were effected. CySEC has set a scale of charges for registration and renewal of registration of trusts as well as for retrieving information. Eligible persons/authorities for having access in the UBO trust register Eligible for having access without any charge to the information entered in the Trust Register will be the trustees and or any other equivalent person who has entered such information thereinto, as well as other competent authorities like the Unit for Combating Money Laundering and Terrorist Financing, the police, the Customs’ Department, and the Tax Department. Furthermore, any person or organization who may demonstrate a legitimate interest and who provides sufficient evidence in this respect , may have access to such information under a fee if the relevant application submitted to CySEC is approved. The procedure is set as follows: CySEC acknowledges with the trustees and or the equivalent person of the receipt of an application from a certain person/authority and the fact that they have initially established that indeed such a person or authority has a legitimate interest. If the trustees do not file written representations within 10 days as of the date it has received CySEC’s acknowledgment, then such a person and or authority will be given access to the information kept in the Trust Register.

Cyprus implements Beneficial Ownership Register for trusts and similar legal arrangements Further to the introduction of the register of Beneficial Owners (BOs) for companies, on the 18 June 2021 Cyprus has introduced a similar register for BOs of Trusts and other similar legal arrangements (the “Trust Register”) to be kept electronically by the Cyprus Securities and Exchanges Commission (CySEC) which is the supervisory authority for the implementation and operation of the Trust Register. The Trust Register was implemented through CySEC’s Directive for the prevention and suppression of money laundering and terrorist financing (register of beneficial owners of express trusts and similar legal arrangements) (the “Directive”) which provides information and guidance in relation to the registration of express trusts and similar legal arrangements in the Trust Register. The Directive applies for express trusts which are defined as trusts created expressly by a settlor at his own will. Trusts arising by operation of law as well as trusts for which the settlor shows no clear intention for their creation are not considered to be express trusts. Registration of an express trust should take place in cases where: The trustee is located or residing in the Republic of Cyprus; The trustee, which is located or residing outside EU, establishes a business relationship or acquires immovable property in Cyprus on behalf of the express trust. Information to be submitted The following information must be submitted for registration: For the trusts and other similar legal arrangements Name, surname and father’s name Date and place of birth Nationality/ies Residential Address Type, number and country of issuance of identification document

On 31 March 2021, the law (Ν. 41(Ι)/2021, the Law) amending the Law on Administrative Cooperation in the field of Taxation (Law N. 205(I)/2012) was published in the Official Gazette of the Cyprus Republic and entered into force. The Law transposed the European Union (EU) Directive (referred to as DAC6 or the Directive) into domestic law. The Law entered into effect as of 1 January 2021, however, it will have a retrospective effect for reportable cross-border arrangements concluded on or after 25 June 2018 provided that one of the prerequisite triggering events is met. The final Cypriot Mandatory Disclosure Rules (MDR) legislation is broadly aligned with the requirements of the Directive with minor differences. Further to the Law, guidance notes will be issued by the Cypriot Tax Department (CTD) to provide clarity over the interpretation of key terms of the Law. The Directive requires intermediaries (including EU-based tax consultants, banks, asset managers, corporate administrative service providers, insurance companies and lawyers) and in some situations, taxpayers, to report certain cross-border arrangements (reportable arrangements) to the relevant EU member state tax authority. This disclosure regime applies to all taxes except value added tax (VAT), customs duties, excise duties and compulsory social security contributions. Cross-border arrangements will be reportable if they contain certain features (known as hallmarks). Under the Directive, an arrangement is reportable if: The arrangement meets the definition of a cross-border arrangement; and The arrangement meets at least one of the hallmarks A-E specified in Annex IV of the Directive and the main benefit test (MBT), where applicable. Administrative fines for non-compliance Breach   Penalty (one-off administrative fine per entity and arrangement) Failure to report a Reportable Cross Border Arrangement (RCBA)   €10.000-20.000 Delay in reporting an RCBA   Up to 90 calendar days: €1.000-5.000 More than 90 calendar days: €5.000-20.000 Filing inaccurate or incomplete or misleading report of an RCBA   €1.000-10.000 Failure to notify other intermediaries or the relevant taxpayer by the intermediary regarding the exemption due to Legal Professional Privilege (LPP)   €10.000-20.000 Delay in the notification of other intermediaries or the relevant taxpayer by the intermediary regarding the exemption due to LPP   Up to 90 calendar days: €1.000-5.000 More than 90 calendar days: €5.000-20.000 Failure to provide the Cypriot Tax Department with information or documents for an arrangement within 14 days from the date of reception of written notice   €1.000-10.000 Failure to pay the administrative fines imposed/Continuance of the relevant breach   Increase of imposed fine up to €20.000   As implied by the provisions of the Law, penalties will also apply for intermediaries/relevant taxpayers who have breached their reporting or notification obligations, as prescribed in the Law, for the transitional period. On 4 June 2021, the CTD announced the non-application of administrative penalties for all filings effected by 30 September 2021 in respect of RCBAs made or to be made from 25 June 2018 up until 31 August 2021. As from 1 September 2021, RCBAs should be reported within 30 days from the rom the relevant triggering event. Remarks Cyprus intermediaries and taxpayers with cross border arrangements should review their existing procedures to continuously monitor their disclosure obligations under the DAC 6, ensuring compliance and minimising the risk of monetary fines.