Cyprus:
Payments To Non-Cooperative Jurisdictions? Beware Of Potential Tax Implications.
24 January 2024
C.Kounnis & Partners
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The update
As of 17 October 2023 the EU List of Non-Cooperative
jurisdictions, the so called EU Blacklist, has been updated with 3
countries namely Antigua and Barbuda, Belize and Seychelles. At the
same time 3 countries were removed from the list: British Virgin
Islands, Costa Rica and Marshall Islands.
The full list now consists of 16 countries as shown in the below
link:
Common EU list of third country jurisdictions for
tax purposes (europa.eu)
Why does this matter?
Taxpayers should closely monitor the implications of any
transactions with EU Blacklisted countries as this may trigger
withholding tax and reporting obligations.
More specifically, as of 31 December 2022, Cyprus applies
withholding taxes on any outbound payments of royalties, interest
and dividends to companies which are on the list of EU-Non
Cooperative jurisdictions.
In addition, arrangements which involve deductible cross-border
payments to the black-listed jurisdictions may trigger mandatory
disclosure rules. I.e. reporting obligations to the Cyprus tax
authorities.
Originally published November 9, 2023.
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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