Filenews 22 August 2022 - by Eleftheria Paizanou
Hundreds of requests from tax authorities in other countries were responded to last year by the Tax Department as part of the exchange of tax information and documents.
At the same time, the Department also sent thousands of requests to other countries, in order to receive information about specific legal and natural persons who have been particularly of concern to the Cypriot authorities. All tax authorities apply specific regulations and directives, develop bilateral or multilateral cooperation through agreements, exchange information with the aim of tackling the phenomenon of tax evasion and the implementation of aggressive tax planning. To prevent revenue loss and for transparency purposes, the Tax Department places particular emphasis on proper and effective international cooperation. Information security is one of the most important tools available to the Department, as it determines its reliability both locally and internationally.
In 2021, monitoring of the implementation of the guidelines adopted in 2020 continued. Specifically, the Department of Taxation, applying the European directives and legislations for the automatic exchange of information, has proceeded with the necessary mechanisms for sending and receiving the required information. The information provided and received by the Department, related to the sources of income that taxpayers had in relation to income from salaries, real estate, insurance contracts and financial information. In detail, the foreign tax authorities have sent 572,139 requests to the Tax Department to receive data and other tax information. The majority of the requests concerned financial information and income tax.
For matters of direct taxation, information is exchanged with other states concerning conventions for the avoidance of double taxation, administrative cooperation and on mutual administrative assistance in matters of taxation of the Council of Europe and the Organisation for Economic Co-operation and Development (OECD). Last year the Department handled 708 incoming requests and 847 in 2020. Moreover, for indirect taxation issues, the Administrative Cooperation Branch of the Tax Department received a total of 322 requests/messages from other Member States. The Cypriot authorities have also sent 121 requests to member states. At the same time, within the framework of the European directives, two thorough audits and 15 other audits have been carried out on financial institutions.
