The recent Global Forum on Transparency and Exchange of Information for Tax Purposes of the OECD took place on 29 and 30 October 2015 in Barbados. Following crucial changes in Cyprus’ legal framework, practices and procedures, the new rating of Largely Compliant has been finally assigned to the Republic of Cyprus.
The last evaluation of the island’s profile took place in November 2013 when Cyprus received the rating of Non-Compliant jurisdiction due to the fact that the Republic has failed to exchange information on requests received from double tax treaty partners on a timely basis. According to OECD, it is required that each and any request for exchange of information is responded by the receiving jurisdiction within 90 days from the date of receipt of the relevant request. The Non-Compliant rating level has motivated Cypriot tax authorities to review and advance their internal systems and procedures relating to communication with taxpayers especially concerning requests, as well as to develop mechanisms enhancing filing of tax returns with the tax authorities and to take appropriate actions against those taxpayers failing to respond to requests received from the tax authorities.
The coordinated efforts of the Cypriot Ministry of Finance and Tax Department that worked tightly with such professional associations as the Institute of Certified Public Accountants of Cyprus and the Cyprus Bar Association, improved the response time significantly and in March 2015 the Peer Review Group of OECD has confirmed the great achievements as well as productive and effective results of the improvements, enabling the Global Forum to change the rating of Cyprus to Largely Compliant one.