The Cyprus tax authorities have always been forthcoming in
issuing advance tax rulings. The advance ruling procedure helps
achieve certainty for clients proposing to effect their
transactions in or via Cyprus, eliminating uncertainty and
establishing the circumstances and extent to which a transaction or
series of transactions would be taxable.
In October 2015, Circular 2015/13 was issued by the tax
authorities setting out the procedure and timeframe for advance
ruling requests. In accordance with this circular, rulings would be
issued with respect to transactions relating to tax years for which
the due date for filing a tax return has not elapsed, and
transactions falling after such date proposed to be undertaken by
existing or new entities. Requests must be made in writing and
include, other than a detailed factual summary of the proposed
transaction and explanation of the tax issues at stake, the name
and tax identification code of the parties involved and evidence of
filing of the relevant tax returns. The application must outline
the tax treatment which the applicant contends to be applicable
with relevant references to the tax legislation and precedents, if
any, and must pose a clear question on confirmation of such
As a follow up to Circular 2015/13, the Cyprus tax authorities
recently issued Circular 130/2016, which provides that fees will be
applicable to ruling applications submitted from 16 May 2016
onwards (other than with respect to matters for which the tax
authorities have an obligation to respond by law, being (i)
requests for the exemption from taxation concerning reorganisations
in accordance with s.30 of the Cyprus Income Tax Law; (ii) requests
for the application of tax exemptions on loan restructurings
processes, (iii) requests submitted by an employer in relation to
the application or not of PAYE to a departing employee receiving an
ex gratia payment, and (iv) requests concerning stamp
EUR€1,000 for rulings without an expedition request
EUR€2,000 for rulings with an expedition request
Expedited requests will receive a response within 21 working
days on the condition that all relevant facts and information
relating to the case have been duly submitted. Unexpedited requests
will be processed chronologically. Requests must be submitted
electronically through the official gateway at: email@example.com
containing the completed T.D.219/2016 form and a request and proof
of payment. The new procedure has been implemented with a view to
facilitate the automatic exchange of information on advance
cross-border rulings and advance pricing arrangements in accordance
with the provisions of the EU Council Directive 2015/2376 of 8
December 2015, which amends Directive 2011/16/EU Directive
2011/16/EU that obliges Member States to exchange tax rulings which
are foreseeably relevant to tax administrations and collection in
any other relevant Member State.
An advance cross border ruling is a communication interpreting
the application of a legal or administrative provision contained in
the Cyprus tax laws that satisfies all three of these
It is addressed to a specific person or group of persons, who
are entitled to rely on such communication
It refers to a cross border transaction
It is submitted in advance of the transactions to be carried
out in that other Member State, or in advance of the filing of the
tax return concerning the period in which the transaction is
effected and is made with respect to an investment, the provision
of goods or services or the use or financing of tangible or
Rulings will be binding only with regard to the specific facts
and concerning the taxpayers specifically mentioned in the relevant
request, and for as long as there is no change in the tax law which
would render the ruling outdated. On any change of facts or
parties, a taxpayer should seek a renewed ruling.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The Common Reporting Standard (CRS) has been initiated by the Organization for Economic Cooperation and Development (OECD) aiming at improving international tax compliance and preventing tax evasion, through the automatic exchange of information between the countries that implement CRS.
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