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Due to the impact of the COVID-19 on businesses, the Organization for Economic Cooperation and Development (OECD) and the European Union are looking into ways to expand their access to information that would be useful to tax authorities in their respective Member States.
As a result, the Organization for Economic Cooperation and Development (OECD) has held a consultation on the implementation of a crypto-assets-specific CRS, as well as proposed revisions to the existing CRS framework to include e-money providers and improve compliance.
Furthermore, the EU is currently in the process of implementing the 6th amendment to the EU Directive 2011/16 on Administrative Cooperation, which includes reporting obligations on digital platforms that provide goods or services to EU end users.
The particulars
Deadline for reporting financial institutions in Cyprus to submit annual CRS reports approaching
We would like to remind you that the annual deadline for entities that are required to submit information to the Cyprus Tax Authorities under the CRS legislation is June 30, 2022.
As a reminder, any information due by June 30, 2022 pertains to the reporting period of January 1, 2021, to December 31, 2021.
The OECD has completed its consultation process on whether crypto-assets and e-money should be included in the CRS.
The Organisation for Economic Co-operation and Development ("OECD") completed a public consultation process on proposed changes to the scope of the CRS on April 29, 2022, which included the following:
- The creation of a Crypto-Asset Reporting Framework (CARF), which would make cryptocurrency and other crypto-assets reportable. Intermediaries that allow for the exchange of crypto-assets into currency or other assets, facilitate reportable payments, or allow for the transfer of crypto-assets would bear the brunt of the responsibility.
- A revision of the existing CRS to include e-money providers, as well as rule revisions to improve compliance and reflect developments since the CRS was introduced in 2014.
In October 2022, the OECD is expected to release its proposals for new rules. To implement the CARF on a global scale, a new Multilateral Competent Authority Agreement (MCAA) would be required, which is expected to be published alongside the proposals in October 2022.
Despite the lack of a proposed timeline for adoption, early adopting jurisdictions could implement the above proposals as early as January 1, 2024.
EU Directive on Administrative Cooperation (DAC 7) amendments to be implemented
The 7th version of the EU Directive 2011/16 on Administrative Cooperation ("DAC 7"), which is expected to have a significant impact on the digital platform economy, will go into effect on January 1, 2023.
These modifications are expected to have an impact on digital platforms that allow sellers to:
These modifications are expected to have an impact on digital platforms that allow sellers to:
- Rent immovable property (e.g. short term accommodation)
- Provide personal services (e.g. on-demand household/professional services) - Rent transport
- Sell goods.
Sellers who use such platforms to provide in-scope services should be affected as well.
In relation to the sellers offering services on the platform, impacted platforms are expected to collect information similar to that collected by financial institutions under current CRS legislation. The collected data should be reported to the appropriate competent authority in each EY Member State where the reportable seller resides. In relation to information for the reporting period 1 January 2023 to 31 December 2023, the first reporting deadline is expected to be the 31st of January 2024.
How we can assist you?
We are always at your disposal to discuss any questions you may have and to assist you with the preparation and submission of declarations.
*DISCLAIMER: This article and its publication are intended to provide a brief introduction and act as a general guide. This is provided for information purposes only and cannot be utilized as a substitute for professional advice. This document does not represent a legal opinion and one must not rely on it without receiving independent advice based on the particular facts of its own case. No responsibility is accepted by the author or the publishers for any loss suffered from acting or refraining from acting based on the contents of this publication.
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