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T&L D-briefs - March 2024

T&L D-briefs is a bi-monthly T&L update, taking the form of a series of webcasts, articles and other sources, all bundled together in a newsletter!

In this issue, we:

 

  • share our thoughts on how artificial intelligence could be an enabler to Tax Directors of large multinationals;
  • share recent local and international tax developments;
  • clarify what you need to know in relation to TP documentation; and
  • inform you about the abolition of the annual levy from 2024 onwards.

Generative AI: What should Tax Directors be thinking about? 

 

Generative AI is gaining significant attention. Tax professionals now have access to powerful AI-enabled solutions that can revolutionise their decision-making processes. In this publication, we provide tax directors with a strategic
framework for integrating Generative AI within their tax function. We also
address the risks associated with AI and the importance of developing a
longer-term strategy to harness its potential.

International tax developments

 

Revised “EU Blacklist”

On 20 February 2024, EU Member States decided (link here) to remove four jurisdictions – the Bahamas, Belize, Seychelles, and Turks and Caicos Islands – from the EU list of non-cooperative jurisdictions for tax purposes (Annex I), also known as “the EU Blacklist”.

It is worth highlighting that subject to conditions, Cyprus applies withholding taxes (click here for more) on certain outbound payments of dividends, interest, and royalties if the recipient is a company based in a black listed country.

The EU Blacklist is also relevant for DAC6 purposes, as payments made from a Cyprus tax resident company to a company resident for tax purposes in a jurisdiction that is included in the EU Blacklist may trigger a reporting obligation irrespective of whether the transaction is aimed at generating a tax benefit.

 

Local Tax developments

Stamp duty examinations

On 12 March, the Cyprus Tax Authorities (CTA) issued an announcement (link here) reminding taxpayers that stamp duty is payable on all agreements and documents which involve property situated in Cyprus, as well as matters or issues which take place in Cyprus.

Documents relating to assets and liabilities outside Cyprus are usually considered as involving matters or issues outside Cyprus.

According to the announcement, the CTA intends to carry out examinations, ensuring the correct application of the Stamp Duty Law, commencing from contracts signed in the construction industry.

Clarifying the TP documentation landscape

 

Recently, there have been significant tax developments in Cyprus with respect to the transfer pricing environment. Given the multiple sources of guidance and frequent updates, we decided to clarify what companies need to know by answering 20 key questions.

Abolishment of annual levy

 

In a significant move, Cyprus has abolished the compulsory €350 annual fee for registered entities, effective from 2024. This decision is a part of broader economic initiatives aimed at bolstering the island's business sector.

Contact Us

 

For general queries and comments on Tax Webcasts, please send an email to cyprusTLdbriefs@deloitte.com.

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